How to Approach a Review of Your TMI Statement

Receiving a TMI reconciliation doesn't mean you have to accept it as-is. You have the right to review it, ask questions, and dispute charges that don't align with your lease. Here's a practical, step-by-step approach.

Step 1: Gather Your Documents

Before you can review anything, you need the right paperwork. A reconciliation cannot be assessed in isolation - it must be read alongside your lease.

Documents to pull together:

Your current lease, including all schedules and amendments
The reconciliation statement from your landlord
Reconciliations from prior years (for comparison)
Any correspondence about operating costs from previous years
Your original estoppel certificate, if one exists

Step 2: Read Your Lease's Operating Cost Clauses First

Before looking at a single number in the reconciliation, read the sections of your lease that govern operating costs. These typically include:

The definition of operating costs (what's in and what's out)
The list of exclusions
The management fee cap
How your proportionate share is calculated
Any audit rights you have (more on this below)
Deadlines for disputing the reconciliation

This step is non-negotiable. You cannot evaluate whether a charge is legitimate without knowing what your lease actually permits.

Step 3: Confirm the Basic Numbers

Start with the foundation before getting into individual line items.

Check:

Your rentable area - does it match what's in your lease?
The total building area used to calculate your proportionate share - is it consistent with prior years?
Your proportionate share percentage - does the math add up?

Even a small error in the denominator (total building area) can affect every dollar billed to you.

Step 4: Review Each Line Item Against Your Lease

Now go through the reconciliation line by line and ask, for each item: Is this permitted under my lease?

Flag anything that:

Matches an item on your lease's exclusions list
Looks like a capital expenditure (major replacement or improvement) rather than a repair
Appears to be an owner-specific cost (mortgage, taxes on profit, leasing fees)
Is a management or administrative fee that exceeds the leased cap

Keep a running list of every item you question - you'll need it later.

Step 5: Compare to Prior Years

Pull your reconciliations from the last two or three years and compare categories side by side. Look for:

Line items that appeared in one year and not others
Categories that grew significantly year over year
New fees or descriptions that weren't present before

Inconsistencies don't always mean an error, but they warrant an explanation. A landlord should be able to justify any significant change.

Step 6: Request Backup Documentation

You have the right to ask your landlord for supporting documentation on any line item you question. This is standard practice and a reputable landlord will have no issue providing it.

Request:

Invoices or contracts for large maintenance items
Insurance certificates showing the actual premium for the building
Management fee agreements confirming the applicable rate
A breakdown of any administrative overhead charge
Utility invoices, especially if costs seem high

Send your request in writing (email is fine) and keep a copy. Be specific about which line items you're asking about.

Step 7: Know Your Audit Rights

Most commercial leases include an audit clause - a right for the tenant to formally audit the landlord's operating cost records, typically within a specified window (often 12 months from receiving the reconciliation).

Check your lease for:

How long you have to exercise your audit right
Whether you must give written notice
Whether the audit must be conducted by a qualified professional
Whether audit costs are recoverable if errors are found

Missing an audit window means losing the right to challenge that year's reconciliation - so check your deadline as soon as you receive the statement.

Step 8: Raise a Formal Dispute if Warranted

Start with the foundation before getting into individual line items.

Check:

Your rentable area - does it match what's in your lease?
The total building area used to calculate your proportionate share - is it consistent with prior years?
Your proportionate share percentage - does the math add up?

Even a small error in the denominator (total building area) can affect every dollar billed to you.

Step 9: Don't Let Deadlines Pass

This is critical. Many leases include an "irrevocability clause" - meaning that if you don't dispute the reconciliation within a set period (often 90 to 180 days), it's deemed accepted. Check your lease for this clause and calendar the deadline the moment you receive the statement.

If reviewing your reconciliation feels overwhelming, simplease can do it for you. Our AI analyzes your lease and statement together and flags every charge that doesn't belong.

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