A tenant leased 4,800 sq ft in a 60,000 sq ft building. Their lease specified a fixed pro-rata share of 8.0% (4,800 / 60,000). The reconciliation applied 10.2%, noting the building had 47,100 sq ft of occupied space. The landlord was excluding vacant units from the denominator. CAMAudit flagged the variance: on a $185,000 CAM pool, the tenant was billed $18,870 instead of the correct $14,800, a $4,070 overcharge for that year alone.
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Rule 4 of 20 · Math-based rule
Pro-Rata Share Error: How One Wrong Number Inflates a Client's Entire CAM Bill
The pro-rata share fraction is the multiplier applied to every line item in the CAM statement. Errors in this single number inflate the client's entire bill proportionally.
Even a 1% error in a client's pro-rata share fraction compounds across every line item in the CAM statement. On a $100,000 total CAM bill, that's $1,000 in overcharges every year from a single number.
What it checks
A pro-rata share error is a miscalculation in the fraction used to allocate common area expenses to a specific tenant. The pro-rata share is typically the tenant's rentable square footage divided by the total rentable square footage of the building or applicable CAM pool. Because this fraction is applied as a multiplier to every single line item in the CAM reconciliation, even a small error in the denominator or numerator produces an overcharge that compounds across the entire bill. Errors arise from using the wrong denominator by excluding vacant space from the pool, an incorrect numerator from a faulty measurement of the tenant's space, or misapplication of custom allocation provisions written into the lease. CAMAudit's pro-rata share detection rule extracts the lease-defined components of the fraction and compares them against what the landlord actually applied in the reconciliation, then calculates the dollar overcharge produced by any discrepancy.
The math
Pro-Rata Share Error in 3 checks
- 1
CAMAudit extracts the client's pro-rata share percentage and its components from the lease: the leased square footage as the numerator and the applicable building or project square footage as the denominator. CAMAudit also identifies whether the lease uses a fixed percentage for the entire term, a recalculated annual percentage, or a custom allocation formula.
- 2
CAMAudit's pro-rata share detection rule compares the share used in the client's reconciliation against the figure computed from the lease definition. When the landlord applied a different percentage, CAMAudit flags the discrepancy and calculates the overcharge by multiplying the variance by the total CAM pool charged that year.
- 3
CAMAudit checks whether the denominator definition matches common manipulation patterns. Landlords sometimes exclude vacant space from the denominator, which shrinks it and inflates each remaining tenant's share. The lease should specify whether the denominator is fixed or adjusts for occupancy, and CAMAudit flags when the landlord has departed from that specification.
What a finding cites
Related glossary terms
FAQ
Questions about pro-rata share error
What should the denominator in a client's pro-rata share be?
The lease defines the denominator. It is usually the total rentable area of the building, the total rentable area of the applicable CAM pool, or the total occupied rentable area. The distinction between total and occupied area is critical: using occupied area inflates each tenant's share when the building has vacancies.
Is a pro-rata share fixed or does it change annually?
It depends on the lease. Some leases specify a fixed percentage for the entire lease term. Others recalculate annually based on the total occupied square footage. If the lease uses a fixed percentage, the landlord cannot unilaterally apply a different figure. If it recalculates annually, request the square footage schedule used each year.
What happens if a client's leased square footage was measured incorrectly?
A pro-rata share numerator is based on the rentable square footage of the leased space. If that figure is wrong, every year's CAM allocation is also wrong. Clients can request a re-measurement under the lease's audit rights clause. Some tenants discover that a re-measurement both reduces their base rent and corrects their pro-rata share.
Can the pro-rata share be different for different CAM expense categories?
Yes. Some leases specify separate pro-rata shares for utilities, parking, security, and other cost pools. A single blanket pro-rata share applied to all categories can overcharge depending on which categories use a different allocation basis. CAMAudit checks each category against the lease's allocation rules.
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