Travis County TX: gross-up advisory on insurance costs case study
A public-record office lease case study with Rule 5 advisory finding on $52,800 in property insurance that must not be included in gross-up calculations.
What happened
The Travis County Appraisal District lease provides gross-up to 95% occupancy on variable expenses. The 2022 reconciliation included $52,800 in property and casualty insurance in the gross-up base. Insurance is a fixed cost; it does not increase when occupancy rises. Applying a gross-up factor to insurance inflates the tenant's share artificially.
Findings from the pipeline
Rule 5: Gross-Up Violation
medium confidence
$0
'Property & Casualty Insurance' is classified as insurance (a fixed cost) and should not be grossed up. Exact overcharge requires manual review.
Math proof
item='Property & Casualty Insurance', amount=52800.00, classification=insurance (fixed cost, must not be grossed up)
Statement references
- Property & Casualty Insurance
Lease evidence
- Gross-up to 95% occupancy applies to variable operating expenses only.
- Property insurance is a fixed cost not subject to occupancy normalization.
Why this matters
Insurance gross-up errors are particularly common because reconciliation software often applies a global occupancy multiplier to all line items. Tenants rarely detect this because the gross-up adjustment is buried in the reconciliation math rather than shown as a separate line item.
Dispute letter draft excerpt
Request for Cooperative Review of Certain Line Items. The automated review flagged possible gross-up applied to property insurance in the 2022 reconciliation, pending confirmation of occupancy rate used.
Related Resources
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