Charleston County, SC government leases office space managed by Thalhimer as property management agent. Public A/P records show the county wired a $41,283.76 CAM reconciliation payment in March 2019. In the fixture scenario: building total operating expenses of $412,837.60, tenant at 10% pro-rata share, actual tenant share of $41,283.76, monthly estimates paid of $3,000 times 12 equals $36,000. Correct true-up: $5,283.76. Landlord billed: $8,500.00. CAMAudit flagged the $3,216.24 overcharge.
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18
Rule 18 of 20 · Math-based rule
Estimated Payment True-Up Error: When the Year-End Balance Due Is Wrong by Thousands
The true-up is an arithmetic calculation with one correct answer. Actual tenant share minus estimates already paid equals the balance due. Any deviation beyond a rounding tolerance is a billing error.
If a landlord's year-end reconciliation 'Balance Due' is higher than the difference between the tenant's actual CAM share and what they paid in monthly estimates, the client is being overcharged. For a tenant paying $3,000/month in estimates, even a $3,200 arithmetic error on a single true-up is money that was never owed.
What it checks
An estimated payment true-up error occurs when the year-end reconciliation balance billed by the landlord exceeds the mathematically correct true-up amount. The correct true-up is calculated by taking the tenant's actual share of total building operating expenses for the year, which equals the total building expenses multiplied by the tenant's pro-rata share percentage, and subtracting the cumulative monthly CAM estimates the tenant already paid throughout that year. Any amount billed above that difference, after applying a rounding tolerance, is an arithmetic overcharge. These errors occur most often when landlords compute the year-end balance in a spreadsheet separate from their property management system, introducing stale estimate totals, wrong pro-rata percentages, or simple arithmetic mistakes. CAMAudit's true-up detection rule extracts all three required inputs from the uploaded documents and performs the correct calculation, then compares it to the billed Balance Due to identify any overage.
The math
Estimated Payment True-Up Error in 3 checks
- 1
CAMAudit extracts the landlord's billed true-up amount from the reconciliation statement, specifically the line labeled 'Balance Due,' 'Year-End Adjustment,' or a similar designation. CAMAudit identifies this figure as the starting point for the arithmetic verification.
- 2
CAMAudit's true-up detection rule calculates the expected true-up using three inputs extracted from the uploaded documents: the total building operating expenses from the reconciliation statement, the tenant pro-rata share from the lease, and the cumulative monthly estimates the tenant paid throughout the year. CAMAudit multiplies the building total by the pro-rata share to derive the actual tenant obligation, then subtracts the estimates paid.
- 3
CAMAudit flags the finding as an overcharge when the billed true-up exceeds the calculated expected true-up by more than the tolerance, which is the greater of $50 or 0.5% of the tenant share of actual expenses. CAMAudit reports the exact dollar difference between what was billed and what was owed so your firm can present the specific arithmetic in the dispute letter draft.
What a finding cites
Related glossary terms
FAQ
Questions about estimated payment true-up error
What is a CAM true-up and why does it get billed wrong?
A CAM true-up is the year-end reconciliation payment that settles the difference between what the tenant paid in monthly estimates and what they actually owed based on final operating expenses. Errors occur most commonly when landlords compute the balance manually in a spreadsheet outside the property management system, introducing incorrect pro-rata percentages, stale estimate totals, or simple arithmetic mistakes.
What inputs does CAMAudit's true-up detection rule require?
CAMAudit's true-up detection rule requires three inputs: the total building operating expenses from the reconciliation statement, the tenant pro-rata share from the lease, and the cumulative monthly estimates paid throughout the year. If the reconciliation statement does not include the estimate total, the tenant's own payment records or accounts payable ledger can supply that figure.
How does the tolerance work in the true-up calculation?
The tolerance is the greater of $50 or 0.5% of the tenant's share of actual expenses. This prevents the true-up detection rule from flagging rounding differences between the landlord's software and CAMAudit's calculation. Only amounts above the tolerance are flagged as overcharges requiring dispute.
Can the true-up work in the other direction, where the landlord owes the tenant a refund?
Yes. If cumulative monthly estimates exceeded the tenant's actual share of building expenses, the landlord owes a credit. The same formula applies: if the expected true-up is negative, meaning the tenant overpaid through monthly estimates, the landlord should issue a credit rather than a balance due. Review the reconciliation for a credit line if the estimates appear higher than the final expense allocation.
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