A CAM structure where tenant payments fluctuate based on actual operating expenses incurred each year, with an annual reconciliation process to true up estimated payments to actual costs.
Variable CAM creates the most opportunity for overcharges because: (1) the expense pool definition determines what can be included; (2) the pro-rata share calculation determines each tenant's allocation; (3) annual reconciliations may include costs from multiple years; and (4) audit rights are essential to verify accuracy.
In a variable CAM structure, a landlord routinely estimated monthly CAM 20-30% above prior-year actual costs. Tenants prepaid inflated estimates all year, then received modest credits at reconciliation - giving the landlord an interest-free working capital loan of $180,000 annually.
In a variable CAM structure, request that monthly estimates be based on prior-year actual costs, not landlord projections. Negotiate for reconciliations within 90 days of year-end.
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Find My OverchargesThis 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.
