Tenant’s Audit Rights Clause Samples
The Tenant’s Audit Rights clause grants the tenant the ability to review and verify certain records or financial statements maintained by the landlord, typically those related to operating expenses, common area maintenance charges, or other pass-through costs. In practice, this clause allows the tenant to request access to supporting documentation and, if necessary, conduct an audit to ensure that charges billed by the landlord are accurate and in accordance with the lease terms. Its core function is to promote transparency and accountability, helping to prevent overcharges and resolve disputes regarding financial obligations under the lease.
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Tenant’s Audit Rights. Annually, within 120 days after the end of each calendar year or Tax Fiscal Year, as applicable, Landlord shall furnish to Tenant a report setting forth in reasonable detail the Operating Costs and Taxes for the immediately preceding calendar year (in the case of Operating Costs) or Tax Fiscal Year (in the case of Taxes). Tenant shall have the right to audit Landlord’s books and records relating to Operating Costs and/or Taxes with respect to the period covered by each such report within six months after receipt of such report (such six month period being called the “Audit Period”) by delivering a notice of its intention to perform such audit to Landlord. If, as a result of such audit, Tenant believes that it is entitled to receive a refund of any Additional Rent paid by Tenant in respect of Operating Costs and/or Taxes, Tenant shall deliver to Landlord, no later than 30 days after expiration of the Audit Period, a notice demanding such a refund, together with a statement of the grounds for each such demand and the amount of each proposed refund. The cost of any such audit shall be paid by Tenant, except that, if it is established that the Additional Rent in respect of Operating Costs or Taxes, as applicable, charged to Tenant for the period in question was overstated by more than 3%, the reasonable out-of-pocket cost of such audit paid to a third party other than an employee of Tenant shall be paid or reimbursed to Tenant by Landlord. Provided that Landlord has complied with Section 4.3(b) or Section 4.3(e), as the case may be, an overstatement for the purposes of allocation of audit costs shall not be deemed to exist due to a refund of Taxes. Any audit shall be performed by either (a) Tenant’s or Tenant’s Affiliates regular employees or (b) a reputable certified public accountant reasonably acceptable to Landlord whose compensation is not contingent on the results of the audit. As a condition of Tenant’s right to audit under this Section 4.6, Tenant agrees, and shall cause any outside auditor retained by Tenant to agree, to maintain the confidentiality of the results of the audit, subject to the right to disclose such results in any legal proceedings regarding the accuracy of the charges for Additional Rent in respect of Operating Costs or Taxes. If Landlord determines that a report previously furnished by Landlord was in error, Landlord may furnish a corrective or supplemental report to Tenant within six (6) months after the original report was furnishe...
Tenant’s Audit Rights. Provided that Tenant is not in Default under the terms of this Lease, Tenant, at its sole cost and expense, shall have the right within sixty (60) days after the delivery of each Expense Statement to review and audit Landlord’s books and records regarding such Expense Statement for the sole purpose of determining the accuracy of such Expense Statement. Such review or audit shall be performed by a nationally recognized accounting firm that calculates its fees with respect to hours actually worked and that does not discount its time or rate (as opposed to a calculation based upon percentage of recoveries or other incentive arrangement), shall take place during normal business hours in the office of Landlord or Landlord’s property manager and shall be completed within three (3) business days after the commencement thereof. If Tenant does not so review or audit Landlord’s books and records, Landlord’s Expense Statement shall be final and binding upon Tenant. In the event that Tenant determines on the basis of its review of Landlord’s books and records that the amount of Expenses paid by Tenant pursuant to this Paragraph 4 for the period covered by such Expense Statement is less than or greater than the actual amount properly payable by Tenant under the terms of this Lease, Tenant shall promptly pay any deficiency to Landlord or, if Landlord concurs with the results of Tenant’s audit, Landlord shall promptly refund any excess payment to Tenant, as the case may be. Landlord shall pay for any reasonable audit expenses if such excess payment exceeds the aggregate Expenses in Landlord’s Expense Statement by seven percent (7%).
Tenant’s Audit Rights. Landlord shall keep reasonably detailed records of all Operating Expenses and Real Estate Taxes for a period of at least two (2) years. Not more frequently than once in every 12-month period and after at least twenty (20) days’ prior written notice to Landlord, Tenant together with any representative of Tenant shall be permitted to audit the records of the Operating Expenses and Real Estate Taxes. If Tenant exercises its audit rights as provided above, Tenant shall conduct any inspection at a reasonable time and in a manner so as not to unduly disrupt the conduct of Landlord’s business. Any such inspection by Tenant shall be for the sole purpose of verifying the Operating Expenses and/or Real Estate Taxes. Tenant shall hold any information obtained during any such inspection in confidence, except that Tenant shall be permitted to disclose such information to its attorneys and advisors, provided Tenant informs such parties of the confidential nature of such information and uses good faith and diligent efforts to cause such parties to maintain such information as confidential. Any shortfall or excess revealed and verified by Tenant’s audit shall be paid to the applicable party within thirty (30) days after that party is notified of the shortfall or excess to the extent such overage or shortfall has not previously been adjusted pursuant to this Lease. If Tenant’s inspection of the records for any given year or partial year reveals that Tenant was overcharged for Operating Expenses or Real Estate Taxes by an amount of greater than six percent (6%), Tenant paid such overage and such overage was not otherwise adjusted pursuant to the terms of this Lease, Landlord shall reimburse Tenant for its reasonable, third party costs of the audit, up to an amount not to exceed $5,000.
Tenant’s Audit Rights. If Tenant disputes the amount of Operating Expenses set forth in any Actual Statement delivered by Landlord, Tenant shall have the right, to be exercised, if at all, no later than six (6) months following receipt of such Actual Statement to cause Landlord's books and records with respect to the preceding calendar year to be audited, at Tenant's expense, by a certified public accountant mutually acceptable to Landlord and Tenant. The amounts payable under Subparagraph 6.6 by Landlord to Tenant or by Tenant to Landlord as the case may be shall be appropriately adjusted on the basis of such audit. If Tenant fails to request an audit with the 67 month period, such Actual Statement shall be conclusively binding upon Landlord and Tenant.
Tenant’s Audit Rights. Tenant shall have the right, with fifteen --------------------- (15) days' written notice to Landlord and at Tenant's sole cost and expense, to audit Landlord's books and records pertaining to the Actual Costs for the preceding year and for the Base Services Year one time per year within one hundred eighty (180) days of Tenant's receipt of Landlord's reconciliation at Landlord's or Landlord's property manager's place of business. If a discrepancy in Tenant's favor is discovered, then Landlord must reimburse Tenant immediately for any overpayment and must pay for such audit if the discrepancy results in any overpayment of more than five percent (5%).
Tenant’s Audit Rights. Tenant shall be entitled from time to time to audit and verify the operations of the Building and/or the related books and records of Landlord to assure that the operating cost from time to time reported by Landlord are consistent and in accordance with the provisions of this Section 4.05. As to any calendar year, any such undertaking by Tenant must be initiated before the end of the following calendar year and, absent fraud or gross negligence on Landlord's part, the operating costs as timely reported by Landlord for such calendar year shall be deemed controlling upon the expiration of Tenant's audit and verification rights for such calendar year under this Section 4.05. In the event of any errors, the appropriate party shall make a correcting payment in full to the other party within thirty (30) days after the determination and communication to all parties of the amount of such error. In the event of any errors on the part of Landlord in excess of three percent (3%) of the total annual amount of Tenant's Excess Operating Costs. Landlord shall also reimburse Tenant for all costs of such audit and verification reasonably incurred by Tenant within such thirty (30) day period.
Tenant’s Audit Rights. Upon written request of Tenant not more than once annually, Landlord agrees to make its books and records (including, without limitation, relevant backup materials in Landlord’s possession or control) (collectively, the “Audit Records”) relating to Landlord’s Services and any utilities, insurance and taxes payable by Tenant hereunder for the prior calendar year available for examination and audit during normal business hours at Landlord’s principal office in the greater Boston area, at its manager’s office in the greater Boston area, or at the Building; provided that any such examination or audit shall be by an employee of Tenant or Tenant’s certified public accounting firm, the fees of which are not determined on a contingent basis, shall be at Tenant’s sole cost and expense, unless such audit reveals an overstatement of five (5%) percent or more, in which case Landlord shall pay the costs of such audit, and may be conducted for any particular calendar year only if a notice is sent by Tenant requesting the same not later than sixty (60) days following delivery of Landlord’s Statement for the applicable calendar year. A Landlord representative shall, upon reasonable notice and at reasonable times, meet with Tenant at Landlord’s principal office or its manager’s office to discuss the Audit Records. If Tenant’s audit discloses a discrepancy which the parties agree (or a court of competent jurisdiction determines in a final non-appealable order) involves an overcharge to Tenant, Landlord shall promptly refund Tenant the overpayment by Tenant.
Tenant’s Audit Rights. Landlord shall maintain books and records of all Expenses and shall permit Tenant to audit Landlord's statements for any annual period so long as (i) written notice of such audit is provided to Landlord within ninety (90) days of Tenant's receipt of the accounting required by Section 4.c.3 and (ii) such audit is completed within sixty (60) days of Tenant's intent to audit notice. If Tenant elects to audit such books and records, Landlord shall reasonably cooperate with Tenant and any deficiency or overpayment disclosed by such audit shall be promptly paid or refunded as the case may be. If Tenant retains a third party to conduct such audit, such third ▇▇▇▇▇ must be a certified public accountant from an accounting firm reasonably acceptable to Landlord. Tenant may not have such review performed on a contingency fee basis. If any such audit discloses that the Expenses reflected on Landlord's statement were overstated by more than five percent (5%) of the actual Expenses for the subject year, Landlord shall reimburse Tenant for the reasonable costs of such audits, not to exceed $1,000.00. The results of any such audit shall be held in strict confidence by Tenant and its representatives. If Landlord disputes the audit, both parties shall within twenty (20) days agree upon a neutral third party certified public accountant whose determination shall be binding upon both parties, the cost of which shall be split evenly between Landlord and Tenant.
Tenant’s Audit Rights. Provided Tenant gives Landlord written notice of objection within thirty (30) days following receipt of Landlord's annual reconciliation statement, Tenant shall have the right, for a period of sixty (60) days following the date of Tenant's notice of objection, to inspect Landlord's books and records pertaining to the reconciliation of Additional Rent for the previous calendar year and the projection of Additional Rent for the current calendar year. Tenant's audit of Landlord's books and records must be conducted in the office of Landlord's property manager during normal business hours upon reasonable advance written notice to Landlord. The books and records shall be kept by Landlord in accord with generally accepted accounting principles consistently applied. If Tenant disputes the accuracy of Landlord's annual reconciliation statement, Tenant shall still pay the amount shown owing. Tenant may, however, within said 60-day inspection period, begin arbitration of any dispute as provided in this Lease. Tenant may recover that part of the Additional Rent paid (plus interest at eighteen percent (18%) per year or the maximum then allowed by applicable law, whichever is less), because of any errors in Landlord's annual reconciliation statement or Landlord's books and records pertaining to Additional Rent. If Tenant does not file for arbitration within said 60-day period, then Tenant shall be deemed to have accepted as final the amount shown owing on the Landlord's annual reconciliation statement. Gross-
Tenant’s Audit Rights. Tenant or its duly authorized representative may, upon reasonable prior notice during regular business hours, inspect the records of expenses kept by Landlord provided such inspection is commenced within ninety (90) days after the receipt of a statement from Landlord; and is limited to the period covered by such statement, and is conducted by a "Big Five" accounting firm on a non-contingent basis. If Tenant's audit shall disclose an overpayment or an underpayment of the Actual Expenses for such period, then, unless Landlord disputes the correctness of such audit, Tenant shall pay the amount of such underpayment or shall be credited for the amount of such overpayment, as the case may be. Any such audit shall be at Tenant's expenses, provided, however, that if such audit shall disclose an overpayment by Tenant for the period covered by such statement in excess of five percent (5%), the costs of such audit shall be paid by Landlord. Landlord may dispute the results of Tenant's audit by referring the dispute to binding arbitration in accordance with the rules of a nationally recognized arbitration association within sixty (60) days after receipt of Tenant's audit. If one party is solely successful in arbitration, the non-successful party shall bear the costs of arbitration; otherwise, such costs are to be divided equally between the parties. Each party shall bear its own attorney's fees.