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Escalation Wars!
Some certainties in life are ever present, like death and taxes. Some are seasonal: Every winter, birds fly South, and every March 19, the swallows return to San Juan Capistrano.
Operating escalation challenges falls into the seasonal category. When economic times are good, commercial tenants pay rent escalations like clockwork. When times are hard, the same tenants — aided by lease audit consultants working on a contingency basis — suddenly “discover” hundreds of thousands of dollars in alleged escalation overcharges.
Landlords facing escalation challenges must walk a fine line. Rejecting a claim may alienate an otherwise valued tenant paying a good rent. Acceding to a questionable claim may encourage the tenant to raise similar claims in the future, and may embolden other tenants in the building to challenge their escalations.
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