Glossary
Expenses & Charges
CAM Budget
The landlord's estimate of CAM costs for the coming year, used to set the monthly CAM payments a tenant makes before the annual reconciliation. An inflated budget means the tenant overpays all year and then sees a "credit" at true-up time, one that can mask a real overcharge underneath.
Firm impact
A client who sees a credit on their reconciliation often assumes nothing is wrong. Your firm's job is to check whether that credit is masking cost categories that shouldn't have been in the CAM pool at all, since a real overcharge and a budget-driven credit can both show up on the same statement.
How this gets abused
A landlord sets the CAM budget 20% above the prior year's actual costs with no stated basis, collecting higher monthly payments all year. At true-up, the tenant gets a modest credit and assumes the whole bill was fair, never noticing that actual costs still included $40,000 in charges the lease excludes.
Practitioner note
Never treat a true-up credit as proof the CAM pool is clean. Pull the actual expense detail behind the budget-vs-actual comparison and run the full set of overcharge checks regardless of which direction the true-up balance points.
Related terms
FAQ
Questions about cam budget
Does an inflated CAM budget cause a permanent overcharge?
Not by itself. The budget only sets monthly estimated payments; the annual reconciliation determines the actual amount owed. But an inflated budget can produce a credit that distracts from real overcharges buried in the actual expense detail.
Should a firm audit a reconciliation that shows a credit?
Yes. A credit only means the estimated payments were higher than actual costs, not that the actual costs are correct. CAMAudit runs the same full rule set regardless of whether the true-up balance is a charge or a credit.
You know the term. Now check the math.
Get started to deliver white-label CAM audit reports under your firm brand.