| Finding | Billed (bldg) | Allowed (bldg) | Tenant recoverable | Lease basis |
|---|---|---|---|---|
Capital expensed in full Rooftop HVAC Replacement |
90,000 | 6,000 | 11,836 | Capital expenditures are excluded from Operating Expenses except as amortized over their useful life; the annual amortized portion only is recoverable. Useful life 15 yr; annual amortization 6,000. |
Capital expensed in full Parking Lot Resurfacing |
64,000 | 6,400 | 8,116 | Capital expenditures are excluded from Operating Expenses except as amortized over their useful life; the annual amortized portion only is recoverable. Useful life 10 yr; annual amortization 6,400. |
Management fee over cap / wrong base Management Fee |
30,500 | 10,080 | 2,877 | Management fee shall not exceed four percent (4%) of Operating Expenses, excluding taxes, insurance, and capital items. Allowed base 252,000 x 4% = 10,080. |
Administrative fee not permitted Administrative Fee |
18,300 | 0 | 2,578 | No separate administrative or overhead fee is chargeable; administrative cost is deemed included in the management fee. |
Excluded category billed Capital Reserve Contribution |
8,000 | 0 | 1,127 | Reserves, depreciation, leasing commissions, and landlord overhead are excluded from Operating Expenses. |
Gross-up overreach Gross-Up Adjustment |
10,000 | 5,419 | 645 | Variable Operating Expenses may be grossed up to 95% occupancy. Fixed expenses (taxes, insurance) and capital items shall not be grossed up. Variable base 252,000, 93%->95% = 5,419. |
Controllable-expense cap breach Controllable Operating Expenses |
149,000 | 144,900 | 578 | Controllable Operating Expenses shall not increase by more than five percent (5%) over the prior calendar year. Prior year 138,000 x 1.05 = 144,900. |