Every year, somewhere in a lease accounting department, someone opens a spreadsheet in December, scrolls to a renewal option that lapsed back in March, and wonders how it slipped past everyone. It rarely comes down to carelessness. Leases get amended, landlord contacts change, abstracts get keyed in a hurry, and by the time year-end close arrives, the data your books depend on may no longer match the documents it came from.
Year-end is a good moment to find out, because anything you catch now can still be corrected in the period it belongs to, and you walk into audit season with a clean baseline instead of a list of questions. This checklist is built for the close. It covers seven checks that keep your lease data, rent schedules, and lease liability in agreement. If you want to go deeper on disputing landlord charges, our guides to lease audits and CAM audits cover that side of the process.
The seven-point year-end lease audit checklist
Work through these in order. The first three protect your rights under the lease, the next two protect your cash, and the last two protect your financial statements.
1. Confirm every critical date is current
Pull a report of every lease with a critical date in the next 12 months, including expirations, renewal notice deadlines, termination rights, rent commencement dates, and insurance certificate renewals. Check each date against the executed lease and any amendments, not against the last version someone typed into a calendar. If a date moved because of an amendment, make sure the system moved with it.
2. Review options and notice windows
Renewal, expansion, contraction, and termination options usually come with a notice window, and a missed window can cost you the option entirely. Tango’s Lease Paradox research found that 43% of corporate real estate leaders had been forced into an unfavorable renewal or extension in the past year because they lacked time or decision support, and 36% of retailers missed at least one lease opportunity they had negotiated to preserve. For each lease with an option coming up, confirm who owns the decision, when notice is due, and how notice must be delivered (certified mail, a named contact, or a specific address). Flag anything due in the first quarter now, while there is still time to run the numbers.
3. Verify escalations and the rent schedule
Compare the rent your system will bill next year against the lease. Fixed bumps, CPI-based increases, and percentage rent each tend to go wrong in their own way: a bump applied a month early, an index capped when the lease has no cap, a breakpoint entered incorrectly. Spot-check a sample of leases first, then widen the review to any lease that was amended or renewed this year.
4. Check CAM caps and exclusions
If your leases include caps on CAM increases or a list of excluded costs, confirm the terms are recorded accurately, since the cap is only useful if someone applies it. Look at the charges you paid this year against those limits. Our guide to CAM audits walks through how to challenge anything that does not fit.
5. Reconcile pro rata share and open CAM true-ups
Landlords typically send annual CAM reconciliations 30 to 90 days after December 31, depending on the lease, which means last year’s true-up is likely still open as you close. Confirm your pro rata share matches the lease, paying attention to how the denominator is defined (leased, leasable, or occupied area), and decide whether an accrual is needed for the true-up you expect to receive or owe.
6. Test abstract accuracy against the source documents
A lease abstract is only as good as the person who keyed it, and amendments are where it tends to drift. Pull a sample of lease abstracts, prioritizing leases amended this year and your highest-rent locations, and compare key fields to the executed documents: commencement and expiration dates, base rent, escalations, options, and recoverable expense terms. Track your error rate. If one in ten fields is wrong, that tells you where to widen the sample.
7. Tie the lease data to the lease liability
This is the check that connects the audit to the close. For each lease, the payment schedule, term, and discount rate in your system should produce the lease liability on your books, and your roll-forward should reconcile: opening balance, plus interest, less payments, plus or minus any modifications, equals the closing balance. When the numbers do not tie, the cause is usually a data issue from the earlier checks, such as an option exercised but not reflected or an amendment that never reached the schedule. If you are applying ASC 842 or IFRS 16, lease accounting differences between the two make this tie-out worth documenting for your auditors.
Turn the checklist into a routine
A first pass will probably turn up a few corrections, and that is a good result. Log what you find, note which of the seven checks it came from, and look for patterns. If most errors trace back to amendments, for instance, the fix is a better handoff between whoever signs amendments and whoever maintains the data. Run the same checks each year at close and the list gets shorter over time.
For the next layer of detail, our guide to lease audits explains how to review charges against lease terms, and The Retailer’s Guide to CAM Audits covers pro rata shares, capital costs, and caps in depth. Together with this checklist, they give you a full year-end routine from rent schedule to reconciliation.
When your portfolio runs into the hundreds or thousands of leases, working through a checklist by hand starts to strain, and the problem is usually not the data itself. In Tango’s research, 86% of corporate real estate leaders rated their lease information as good or better, yet 91% pull from three or more systems to make a single portfolio decision and only 10% have data that integrates automatically. Our report, Lease Paradox: Why organizations struggle to act on their best real estate data, looks at why teams that trust their lease data still miss the moment to use it, and what the organizations that avoid it do differently.
Lease Paradox
Learn why organizations miss the opportunities they already know about, and how leading teams are moving from reactive to anticipatory lease management.
Lease Paradox
