Glossary
Lease Types
Full Service Lease
A lease structure, common in office towers, where rent is supposed to cover all operating costs with no separate CAM pass-through. The audit angle is confirming a landlord has not hidden a pass-through charge inside a lease marketed to the tenant as full service.
Firm impact
Clients on a full service lease often assume they have no CAM exposure at all, which means an improper pass-through can go unchecked for years. Firms that know to test a "full service" label for hidden charges can uncover findings the client never thought to look for.
How this gets abused
A tenant's full service lease includes a base year clause the tenant's broker never flagged during negotiation. Once expenses rise above the base year, the landlord bills the increase as a separate charge, turning a supposedly full service lease into something closer to a gross lease with an expense stop.
Practitioner note
Read past the "full service" label to check for a base year, expense stop, or escalation clause hiding inside the lease. A full service lease with an expense stop still requires the same audit discipline as a gross lease.
Related terms
FAQ
Questions about full service lease
Does a full service lease ever include CAM pass-throughs?
Not in its purest form, but many leases marketed as full service still include a base year or expense stop clause that lets the landlord bill increases separately. Read the actual lease language, not the label.
Should a firm offer CAM audit services on a full service lease?
Yes, whenever the lease contains a base year or expense stop provision. The scope is narrower than a full NNN audit, but the same overcharge checks apply to whatever costs actually pass through.
You know the term. Now check the math.
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