A client's CAM reconciliation lands, and something looks wrong. The number is higher than expected. A line item does not match what the lease says. The client is not sure if they are reading it right, or if the landlord is.
Here is the problem: the clock starts the moment the client received that statement.
Most commercial leases give a tenant 30 to 90 days to dispute a CAM reconciliation. Some windows are shorter. Miss it, and the statement becomes final, the landlord can treat the billing as accepted. That is not a hypothetical. It is standard lease language, and courts have upheld it.
So what does your team actually do when a client's CAM charges look wrong? Here is the process, step by step.
Step 1: Pull the Lease and Find the CAM Provisions
Before disputing anything, get the source document. Pull the lease. Find the CAM or "Additional Rent" section, usually under a heading like "Operating Expenses," "Common Area Maintenance," or "NNN Charges."
Read these parts closely:
- What expenses are included. The lease should list, or define by reference, what goes into the CAM pool. This is where most overcharges start, expenses that belong to the landlord, or that were excluded during lease negotiation, end up in the pool anyway.
- What expenses are excluded. Many leases carve out capital expenditures, leasing commissions, landlord overhead, and debt service. If the reconciliation includes any of these, that is a dispute.
- How pro-rata share is calculated. The lease should define the numerator (the tenant's square footage) and denominator (the total square footage used in the calculation). Both can be wrong.
- The CAM cap, if the lease has one. A cap limits how much CAM can rise year over year. If the increase exceeds the cap, the landlord has overbilled regardless of the underlying expenses.
- The audit rights clause. This sets how long the client has to dispute and whether they can review supporting documentation.
Write down the specific language. Your team will cite it in the dispute letter draft.
Step 2: Identify the Discrepancy
Compare the reconciliation statement to the lease, line by line. Look for four types of problems.
1. Included expenses the lease excludes. Common examples: roof or HVAC system replacement (capital expenditures, not maintenance), leasing agent commissions for filling vacant space, management fees above the lease's cap, or executive salaries passed through as overhead.
2. A math error in the pro-rata share. Take the client's square footage and divide it by the denominator the landlord used. Does it match the lease? Landlords sometimes use the wrong denominator, either smaller than actual rentable square footage (which inflates the share) or one that ignores an occupancy exclusion the lease requires.
3. A gross-up that went too far. Some leases allow the landlord to gross up variable expenses to a hypothetical 90% or 95% occupancy when the building runs under that. That is legitimate in theory. In practice, landlords sometimes apply the gross-up to fixed expenses, which do not scale with occupancy, or gross up the entire expense pool rather than just the variable portion.
4. A base year that changed without notice. If the lease uses a base year for expense comparisons, the reconciliation should use the same base year set at signing. If it shifted, or the landlord adjusted the base year expenses downward, the comparison is off.
Document exactly what your team found: which line item, what the lease says about it, and what the reconciliation shows.
Step 3: Calculate the Overcharge
Put a number on it. A vague dispute ("this looks too high") goes nowhere. A specific one ("the management fee calculation applied a 6% rate; the lease caps it at 4%, a $2,840 overcharge") gets resolved.
For each discrepancy:
- Find the dollar amount in the reconciliation.
- Calculate what the correct amount should be under the lease terms.
- Compute the difference.
Add up every difference. That total is the claimed overcharge. Keep the math visible, show the landlord exactly how your team got the number. If they cannot point to a specific flaw in the calculation, they have to address it.
This is where most manual reviews stall, because the math gets complicated fast. Management fee overcharges require reading the fee-basis definition (gross revenues vs. total expenses vs. net CAM pool each give a different result). Pro-rata share errors require knowing the correct denominator. CAM cap violations require reconstructing the prior year's gross CAM and applying the annual increase limit.
That is the problem I built CAMAudit to solve. Route a client's lease and reconciliation through CAMAudit, run the checks, and review the math before the findings go to the client.
Step 4: Gather the Documentation
Before sending anything, assemble the evidence packet:
- The reconciliation statement from the landlord
- The relevant lease sections (CAM provisions, definitions, any exhibit listing included or excluded expenses)
- Your team's calculations showing the discrepancy
- Any prior-year reconciliations, if the dispute involves a base year comparison or a multi-year CAM cap calculation
- The lease execution date, lease term, and any amendments
If the lease gives the client audit rights over supporting documentation, this is the time to use them. Prepare the records request alongside the dispute letter draft so counsel or your team can confirm the right delivery path before anything formal goes out.
Step 5: Prepare a Dispute Letter Draft
Do not handle a CAM charge dispute verbally. Do not rely on email alone if the lease requires a different notice process. Do not let it live in a text thread with the building manager.
A formal dispute letter draft does several things:
- Creates a paper trail with a clear date, showing the dispute was raised within the required window
- States the position specifically, with lease section references and dollar amounts
- Puts the landlord in the position of responding in writing
- Preserves a factual record so the client or counsel can decide the next step
A dispute letter draft should include:
- The date of the letter and the date the reconciliation was received
- The lease section giving the right to dispute
- A specific description of each discrepancy: line item, what the lease says, what the statement shows
- The calculated overcharge for each item and the total
- A request for a corrected reconciliation, or a meeting to review the discrepancy
- Where applicable, a request to exercise audit rights
Keep the tone factual. This is a documented business review, not a complaint, which makes it easier for counsel to route and evaluate.
Note the disclaimer that belongs on every draft your team sends out: this is a draft for review, not legal advice; have counsel review it before it goes to the client or the landlord.
One more thing worth saying plainly to the client: do not withhold rent as leverage. In most commercial leases, CAM charges count as "Additional Rent." Withholding Additional Rent is a lease default, which means the landlord can pursue termination remedies even if the underlying CAM dispute is valid. Use the dispute process instead.
What Happens After the Packet Goes Out
A few outcomes are common.
The landlord agrees and issues a corrected statement. The best outcome. Get any credit or reduction in writing before the next payment cycle.
The landlord disagrees and explains why. Read the response closely. They may have a basis your team missed, a lease amendment, or a definition that covers the expense differently than expected. Reassess with that information.
The landlord ignores the packet or stalls. Prepare a follow-up referencing the original packet. If the amount is significant, this is when a tenant-side attorney or a forensic CAM auditor gets involved.
The parties negotiate a settlement. Many CAM disputes resolve this way. Landlords often prefer trimming a bill by a few thousand dollars over a formal audit process. A documented position gives your client leverage in that conversation.
The client's audit rights clause is the most important tool here. If the landlord cannot produce requested documentation, that gap strengthens the client's position.
FAQ
Can a client dispute a CAM charge after the lease ends?
Sometimes. Most jurisdictions apply a general contract statute of limitations, often four to six years depending on the state, to overcharge claims. The discovery rule in some states means the clock starts when the client discovered, or should have discovered, the error, not when the reconciliation was issued. Counsel can confirm what applies in a given state. Acting during the active lease is almost always easier than pursuing it after termination.
Does a client need a lawyer to dispute CAM charges?
Not always. If the discrepancy is clear-cut and well-documented, a management fee above the contractual cap, for example, a well-prepared dispute letter draft can resolve it. For large discrepancies, complex gross-up violations, or a landlord who refuses to engage, a tenant-side attorney with commercial lease experience is worth the cost.
What if the lease has an arbitration clause?
Many commercial leases require arbitration before litigation for billing disputes. Read the dispute resolution provision closely. If arbitration is required, counsel should confirm whether the dispute letter draft or notice starts that process. There may be specific timelines and notice requirements to follow. Missing the arbitration trigger date can affect the client's ability to pursue the claim.