California CAM audit service guide
SB 1103 added rules for some small firms. See Civil Code Section 1950.9. This guide does not replace legal review.
This guide covers the SB 1103 rules. It covers leases in Los Angeles, the Bay Area, and San Diego. And it covers the white-label numbers for California firms.
Qualified commercial tenant (California SB 1103): California Civil Code Section 1950.9 defines a qualified commercial tenant and sets rules for certain building operating costs. In covered leases, the tenant may request support in writing and the landlord has 30 days to provide it. The statute does not create a general 60-day CAM dispute window.
What SB 1103 changed and what it did not
California has no broad commercial landlord law. It has one for homes, but not for commercial space. For years, commercial leases ran on contract law alone. Each tenant had to win audit rights at the table.
SB 1103 picked out small commercial tenants. It gave them rights by law. It covers California commercial space. The lease must be signed, renewed, or extended on or after January 1, 2025. The main rights:
The right to an itemized CAM statement. Qualified tenants get a written reconciliation. It must list each cost type and the total. It must show the tenant's pro-rata share. Pro-rata share is the tenant's slice of building costs. It must show the tenant's dollar share and any credits from estimated payments.
The right to cost records. A covered tenant may ask for cost proof in writing. The landlord has 30 days to give it. The landlord cannot collect those costs before giving the proof.
What SB 1103 leaves out. It does not give a broad 60-day dispute right. Coverage depends on the tenant, use, and lease date. Code Section 337 sets four years for many written contract claims. It does not decide when a claim starts or ends.
To see how CAM audit rights work and how California stacks up, read what is a CAM audit.
Los Angeles: strip centers, mixed-use, and big owners
Los Angeles files cover many sites. A site or owner does not prove an error. Check bill and lease.
Strip center and neighborhood retail
Big owners hold many LA strip malls. These sit across several parts of LA. Check these possible errors:
Management fee checks. Compare the billed rate and fee base with the lease. See CAMAudit's Rule 3.
Gross-up errors. Gross-up adjusts shared costs as if the building were full. LA retail with empty space is prone to gross-up errors. This got worse after COVID. When a landlord grosses up past what the lease allows, every tenant pays a bigger CAM share.
CAM cap checks. If the lease has a cap, test its costs and base year. Then check its growth math against the bill.
Mixed-use developments (Arts District, Hollywood, Culver City)
LA built a wave of mixed-use space in Culver City, Hollywood, and the Arts District. These leases have tricky CAM setups. They blend retail, restaurant, office, and home cost pools. The split between pools is hard to check by hand. CAMAudit's pro-rata share rule catches these split errors in mixed-use buildings.
Bay Area: Class A office and tech tenant leases
Bay Area office leases may use base-year and gross-up terms. They may also bar set costs. Read the signed lease before checking the bill.
Gross-up checks. This clause may adjust costs that change with use. Test only the costs and math the lease allows.
Base-year checks. Confirm the lease year, cost pool, and later math. Do this before you state a gap.
Broken exclusion lists. Bay Area tech tenants fight for long exclusion lists. These keep landlord overhead, high fees, and capital work out of the CAM pool. Capital work is a big one-time upgrade. Landlords break these lists with one-size billing systems. Those systems ignore the exact lease terms.
Transit-side offices (Caltrain and BART). These buildings have odd cost setups. They sometimes pass transit upkeep through as building costs. CAMAudit's Rule 2 (Excluded Service Charges) fits these buildings well.
San Diego: medical, biotech, and border retail
San Diego has three market types. Each has its own overcharge pattern.
Medical office buildings. San Diego has a lot of medical space. You see it in Kearny Mesa, Mission Valley, and the La Jolla corridor. These leases have special cost setups. They cover custom HVAC, lab systems, and rule-driven upkeep. When the landlord bills these as normal costs with no lease backing, they are excluded service charges.
Lab sites. Some use NNN leases with gross-up and cap rules. Lab work can need special building systems. Check if the lease lets CAM include those costs.
Border retail (South San Diego, Chula Vista, Otay Ranch). Retail near the US-Mexico border draws heavy foot traffic. That drives up common area upkeep. Watch the management fees and capped costs in these spots closely.
"California Civil Code Section 1950.9 gives some small commercial tenants a written way to request support for building operating costs. The lease and the statute still need file-specific review." - Angel Campa, Founder, CAMAudit
White-label fit for California firms
California firms pay more to run than firms in most states. But your clients sign bigger leases. That means bigger CAM bills to check.
In LA and the Bay Area, scope should match file complexity, review time, and client value. Compare public audit-pack pricing, then use the white-label margin calculator to model your delivery margin.
Which California partners fit best
CPAs and tax advisors. You serve restaurant, retail, and service clients. SB 1103 gives you a clean reason to reach out. Any qualified tenant who has not heard about these new rights since January 1, 2025 is a fresh lead.
Attorneys. You already handle lease disputes. CAMAudit gives you the deep analysis behind a client review and a dispute letter. White-label delivery lets you show findings under your own firm brand.
Fractional CFOs. You serve growing firms with lease portfolios. You read cost data all the time. A CAM reconciliation review is an easy add to your scope. It costs the client less than hiring a separate lease auditor.
Commercial mortgage brokers. You refinance commercial property in LA and the Bay Area. CAM audit findings prove the true cost of occupancy for your loan files.
Frequently Asked Questions
How can SB 1103 affect a CAM file?
For a covered lease, a qualified tenant may ask for cost proof. The landlord has 30 days. There is no broad 60-day dispute window.
Who fits as a "qualified commercial tenant" under California SB 1103?
A qualified commercial tenant under SB 1103 is a business with 5 or fewer employees that occupies retail, restaurant, or service space, or a nonprofit organization. The statute applies to tenants in these categories regardless of the size of their space. Larger businesses, tech tenants, and office occupiers who don't meet the definition are not covered and must rely on contractual audit rights in their lease.
What CAM errors can a Los Angeles review check?
Check each fee, gross-up, cap, and share. Use the lease. The city or site does not prove an error.
Can office and retail CAM terms differ?
Yes. Their cost pools, gross-up rules, limits, and share math may differ. The signed lease and bill control the review.
How can an advisor screen a file under SB 1103?
Check the tenant, lease, request, and 30-day reply. Ask counsel to review any legal view.
What time limit may apply to a state CAM claim?
Code Section 337 sets four years for many written claims. The start date and relief depend on the file. Ask counsel.