Timing of expense reimbursements - all at once at year end or as soon as expense is incurred?
Just curious as to how most landlords handle recovery of reimbursable expenses throughout the year?  Is it common to bill once for a year's worth at year end or bill immediately after the expense is incurred and collect throughout the year?
[{"id": "i1nnhsx", "text": "Standard practice is to include a monthly CAM charge, as an estimate, on the tenant's monthly rent statement. Any over/under is reconciled and trued-up at year end. But that probably depends on the lease.", "replies": [{"id": "i1pk8jb", "text": "How does this generally work for larger non-recurring reimbursable expenses?  If you have an estimate based on prior year actual + 3% or whatever as your estimate for current year, then you have a big winter in Jan/Feb with lots of plowing cost to charge back, for example.  Landlord would typically float that until the year-end true-up?", "replies": [{"id": "i1ptlpe", "text": "&gt;Landlord would typically float that until the year-end true-up?\n\nSadly yes. Or at least in my experience. There are even situations with base year leases where the landlord has to cover that snow plowing 100%, then if the expense isn't incurred the next year, the tenant actually makes money because they got a good base year.", "replies": [{"id": "i1q3dym", "text": "Wow, gotta pay attention to everything!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i1nw2im", "text": "It depends on the type of lease and what the lease contact states as to expense recovery. I have some leases with national-credit big boxes where the tenant reimburse for taxes and insurance only (because the property is free-standing and the tenant is responsible for all repairs and maintenance), so I invoice them three times annually (two tax bills and one insurance premium) as I incur the expense and the tenant reimbursed. Sometimes, the lease will require them to pay taxes and insurance directly, but that is not my preference. On the other end of the spectrum are leases requiring the tenant to reimburse CAM (common area maintenance), which are more common in multi-tenant properties. I\u2019ve had leases that require the tenant to reimburse CAM only once per year (at the end of the year, usually the calendar year, not the \u201clease year.\u201d). I avoid these whenever possible. My preferred format is to require monthly estimated payments of the operating expenses (CAM, taxes and insurance) that are then reconciled annually.\n\nIn the end, we have to handle expense recovery per the method stated in the lease, which is a function of the type of tenant and the type of property. So, I guess that\u2019s a long way of answering your question with \u201cit depends.\u201d", "replies": [], "depth": 1}, {"id": "i1qonls", "text": "Monthly estimate based on budget and annual true-up based on actual expenses.   You should have periods (or seasons) where the estimates exceed the actual expenses and vice versa, but if you budget well it should balance.   For example if you are in the NE US where it snows, your expenses will like exceed your estimates in the winter due to plowing of parking lots, spring is break even at best as you repair the damages of winter, but you can catch up in summer and fall before it starts snowing again.", "replies": [], "depth": 1}]