What happens if a client misses the audit deadline?

If the lease has a binding-and-conclusive provision, missing the deadline may waive the right to dispute that year's charges. Some courts have found these clauses unenforceable in cases of fraud or gross overcharging, but do not rely on this. Exercise rights before the deadline.

Does the audit deadline clock start when the reconciliation is sent or received?

Most leases begin the review on receipt. Some leases deem receipt to occur a fixed number of days after mailing (for example, 3 days after first-class mail). Always check the lease's notice provision, not just the audit rights clause.

Legal & Compliance

Audit Deadline

Last updated: May 2026

The contractual date by which a tenant must initiate a CAM audit after receiving the annual reconciliation statement. Missing the audit deadline can permanently bar the tenant from disputing that year's charges under a binding-and-conclusive clause.

Firm impact

The audit deadline is a hard stop that governs how urgently your firm must act on new engagements. Firms that proactively calendar reconciliation receipt dates and audit windows for all clients capture the full recovery window on every engagement.

How this gets abused

A landlord mailed the reconciliation statement on December 28 with a 60-day audit deadline. Due to holiday mail delays, the tenant received it January 7. The landlord argued the 60-day clock started December 28 and the tenant was already late.

Practitioner note

The audit deadline clock typically starts on receipt, not the mailing date. Document receipt in writing the day the client receives the reconciliation. Establishing the receipt date is frequently the first dispute in any contested audit.