Auditing pass-through charges line by line

A pass-through invoice arrives. It looks like every other bill, so it gets paid. That is the whole problem. Pass-throughs for tax, insurance, and operating expense are where landlords recover costs, and they are reconciled far less carefully than they are billed.

Reading each charge against the lease#

A line-by-line audit reads each charge against the governing lease. Take the clearest case: a real estate tax pass-through against a lease with a base-year stop, the clause that caps the tenant’s share above a base year, often buried in an amendment that overrides the original. Run the billed amount against the base year and the overcharged portion is plain. The same applies to capital expenses misclassified as operating cost, gross-ups beyond the agreed ceiling, and administrative fees the lease does not allow.

At portfolio scale it is recovered cash#

Done once, that is a useful catch. Done across hundreds of locations every month, it is recovered cash that would otherwise have gone out the door unquestioned. The audit depends on having the lease terms structured and the math run automatically, which is the same engine behind CAM reconciliation. Tax pass-throughs in particular often connect to property tax appeals.