Industrial Gross Lease tenants face specific billing risks tied to how expenses are allocated and reconciled. The most common error appears in the section below. CAMAudit runs 14 forensic detection rules on your reconciliation statement to identify every recoverable dollar.
HVAC ambiguity, landlords bill tenants for full HVAC unit replacements (a capital expenditure) under the claim that the lease assigns HVAC "maintenance" to the tenant. A rooftop unit replacement costing $15,000–$40,000 for a warehouse is a capital item the landlord should bear. The distinction between maintenance (tenant) and replacement (landlord) is the central dispute in industrial gross leases.
A lease structure common in industrial, warehouse, and logistics properties where the base rent covers property taxes and building insurance (as in a double net structure), but the tenant takes direct responsibility for utilities, interior maintenance, and HVAC upkeep. The landlord typically retains responsibility for the structural elements (roof, exterior walls, foundation) and exterior maintenance.
Landlord covers: property taxes, building insurance, structural maintenance, exterior maintenance, and typically roof and foundation. Tenant covers: all utilities (electricity, gas, water), interior maintenance, HVAC maintenance and repairs, and interior janitorial. Responsibility for HVAC replacement (as opposed to repair) is the most commonly disputed item.
No formal CAM pool. Utilities are either submetered or tenant-procured directly from the utility provider. HVAC maintenance is tenant-directed. Interior repairs are tenant responsibility. Some industrial gross leases include a landlord right to approve major HVAC contractors. Tenant pays vendors directly, no annual reconciliation is required.
Upload two PDFs. 14 detection rules. Under 15 minutes. Free.
Audit any HVAC invoice to determine whether it is a repair or a replacement. Request the manufacturer's product documentation and the HVAC contractor's assessment, a unit at or near end of useful life that is "replaced" is a capital expenditure regardless of how it is labeled. Verify that structural roof and exterior wall repairs are not passed through as interior maintenance. Review utility invoices if submetered to ensure no markup.
Upload two PDFs. 14 detection rules. Under 15 minutes. Free.
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Find My OverchargesNeed to extract lease terms before your audit?
A CAM audit is only as accurate as your lease data. lextract.io extracts 126 structured fields from any commercial lease PDF: CAM definitions, pro-rata share, caps, base year, and audit rights. So you have the exact terms your landlord is supposed to follow.
Go to lextract.ioThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
