The percentage of total CAM costs allocated to a specific tenant based on the ratio of their leased square footage to the total leasable area of the building or property. A pro-rata share error is one of the most common CAM overcharges.
Pro-rata share = tenant's rentable square footage ÷ total rentable square footage of the property (the denominator as defined in the lease). The lease defines whether the denominator is gross leasable area (GLA), occupied area, or a fixed number. Using a smaller denominator inflates every tenant's share.
A 100,000 SF shopping center has a tenant occupying 5,000 SF. The lease calls for a denominator of total GLA, giving a 5% pro-rata share. The landlord uses occupied space (80,000 SF) as the denominator - raising the share to 6.25%. On $500,000 of CAM, this error alone costs the tenant $6,250/year.
Verify your denominator every year. Request the landlord's occupancy report and compare the denominator on your reconciliation against your lease's definition and the property's actual GLA.
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Start Free AuditThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.