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Auditing firm sues Barclays over alleged rent overcharges at MetLife Building
Commercial Tenant Services said Barclays cut a deal with Tishman Speyer behind its back
A Midtown-based firm that audits leases for commercial tenants is suing a subsidiary of Barclays Group, claiming the company is owed more than $1.5 million for identifying millions of dollars in rent overcharges at the MetLife Building.
Commercial Tenant Services filed a lawsuit in New York State Supreme Court Monday saying it conducted audits from 2006 to 2009 for Barclays Services Corporation at Tishman Speyer’s 200 Park Avenue.
Barclays tapped CTS to look into its lease signed in 2000, covering the entire fourth, fifth, 27th, 28th and 29th floors; parts of the third and sixth floors; and sections of the lobby, garage and mechanical rooms. The lease had been amended several times, and while there were different commencement dates for the various spaces, they all shared an expiration date of July 31, 2017, the Commercial Observer reported.
CTS said in the lawsuit Barclays was set to owe more than $30 million a year in rent, and that it found overcharges that “if corrected, could save Barclays more than $10 million over the leas term.”
The list of erroneous charges included improper amortization of capital expenses, management fees, accounting adjustments, administrative costs, insurance costs and application of tenant reimbursements, as well as inaccurate utilities charges.
But CTS claims it was in the dark when Barclays made a deal with Tishman last year to resolve the disputed charges, allowing the tenant to terminate the lease early. Tishman agreed in March 2015 to give Barclays a $2.5 million reimbursement credit for overpayments from 2005 to 2015, the Commercial Observer reported.
Barclays allegedly failed to inform CTS of the agreement and paid the audit firm a 35 percent fee, or $875,000. CTS, however, claimed the settlement to be “a fraction of the overcharges” it detected, and says it is owed $1.5 million plus interest.
Barclay’s attorney, William Roll of Shearman & Sterling, told the news site that he hadn’t seen the lawsuit, but would to decline to comment if he had. CTS attorney Kimo Peluso of Manatt, Phelps & Phillips did not respond to requests for comment. [CO] – Rich Bockmann