A CAM audit is a formal review of a landlord's CAM reconciliation statement to verify that charges are accurate, properly calculated, and consistent with the lease. The audit compares the statement line items against the lease's expense definition, pro-rata share formula, gross-up provision, and any caps.

How long does a CAM audit take?

With CAMAudit, a full forensic audit runs in under 15 minutes. Traditional CPA-led audits take 4 to 8 weeks and require scheduling, document collection, and manual review. The speed advantage of CAMAudit comes from automating the extraction and detection steps.

What documents do I need for a CAM audit?

You need your commercial lease (including all addenda and exhibits) and your CAM reconciliation statement from your landlord. The reconciliation is usually sent annually, within 90 to 120 days after the close of the lease year. If you haven't received it yet, request it in writing.

What does a CAM audit actually check?

CAMAudit checks 14 categories: management fee overcharge, pro-rata share error, gross-up violation, CAM cap violation, base year error, controllable expense cap overcharge, estimated payment true-up error, gross lease charges, excluded service charges, insurance overcharge, tax overallocation, utility overcharge, common area misclassification, and landlord overhead pass-through.

Do I need an attorney to dispute CAM charges?

Not necessarily. CAMAudit generates a dispute letter draft grounded in your specific findings and lease language. Many tenants resolve CAM disputes by sending this letter directly to their landlord or property manager. For large disputes or adversarial landlords, involving an attorney is advisable.

Case Study: $180,000 Roof Replacement Billed as a CAM Operating Expense

The line item read "Roof maintenance and repair — $180,000." A regional restaurant franchisee managing three locations in the same landlord's portfolio saw it on the Year 3 CAM reconciliation and assumed it was a typo. It wasn't.

The landlord had replaced the entire roof at a Georgia power center and run the cost straight through the operating expenses pool. Every tenant in the property was getting billed their pro-rata share of a capital expenditure — which the lease explicitly prohibited.

The Scenario

The franchise operator held leases on three restaurant units within the same power center in Georgia, all with the same landlord. Combined footprint: approximately 11,400 square feet. The units operated under separate leases, but each lease contained substantially the same language around CAM exclusions.

The relevant clause was direct: capital improvements were excluded from the CAM pool. Repair and maintenance expenses were allowable only up to $10,000 per incident.

In Year 3 of their longest-running lease, the annual CAM reconciliation arrived with the roof line: $180,000.

Their pro-rata share across the three units averaged 8.4% of the total property. That's $15,120 flowing out of their pockets for a single line item — one that should never have appeared in CAM.

What Triggered the Audit

The sheer size of the number flagged it internally. An $180,000 "repair" is not a repair — anyone who's managed commercial real estate, or who's ever gotten a roofing contractor's bid, knows that. A repair patches. A replacement replaces.

The operator uploaded the lease and the Year 3 reconciliation to CAMAudit.

What CAMAudit Found

Rule 1 — the Gross Lease Charges / CapEx Misclassification detection rule — triggered immediately on the "Roof maintenance and repair" line item.

The rule analyzes line item descriptions against lease language governing capital expenditure exclusions. "Roof maintenance and repair" at $180,000 hit several classification signals simultaneously: the dollar threshold far exceeding the lease's $10,000 per-incident cap for repair and maintenance, and keyword patterns consistent with a full structural replacement rather than ongoing upkeep.

The detection output was explicit: this line item shows characteristics of a capital improvement. Verify contractor invoices.

40% of CAM reconciliations contain material errors (Tango Analytics/PredictAP, 2023)

The Math

The property-level overcharge to the entire tenant pool:

$180,000 in capital expenditure passed through as operating expenses

The franchise operator's share:

$180,000 × 8.4% = $15,120

Because they held three leases, they needed to verify pro-rata share calculations for each unit separately — but the fundamental issue was the same for all three: the underlying $180,000 charge was impermissible under the lease regardless of who was being billed or at what percentage.

Under the lease's $10,000 per-incident repair cap, the maximum allowable charge for an actual roof repair would have been $10,000 property-wide, or $840 at 8.4% pro-rata. The difference between what was charged and what was allowable: $14,280 for this tenant.

"Our detection engine flagged this as a capital expenditure based on both the dollar amount and the language pattern. 'Roof maintenance and repair' at $180,000 doesn't pass any reasonable test for routine upkeep — but without the rule running automatically against the lease terms, a tenant could easily write that check and never question it." — Angel Campa, Founder of CAMAudit

The Landlord's Initial Position

When the franchise operator raised the issue, the property management team responded that the work constituted "repairs, not replacement" — their standard opening position in CapEx disputes. They cited a general contractor's invoice that described the scope as "roof system restoration."

This is a common deflection. "Restoration," "renewal," and "rehabilitation" are words roofing contractors use routinely on invoices regardless of the actual scope of work, because the full scope often spans repair and replacement elements.

The CAMAudit documentation request letter — generated automatically as part of the dispute output — prompted the operator to request the original contractor's bid documents and any permit applications filed with the county.

The Resolution

The WeatherGuard contractor invoices, when obtained through the documentation request, told a different story than "restoration." The scope of work included complete tear-off of the existing membrane, replacement of the decking substrate across 60% of the roof surface, and installation of a new roofing system with a 20-year manufacturer's warranty.

Counties in Georgia require building permits for full roof replacements. The permit, once located through the county records, confirmed the scope: "New Roofing System Installation." That document was attached to the dispute letter draft.

The landlord accepted the documentation. The $180,000 was removed from the CAM pool entirely. The franchise operator received a credit of $15,120 applied against their next quarterly CAM estimate.

For guidance on reading what's in a CAM statement and spotting CapEx-sized line items, see how to identify CapEx in a CAM statement.

Key Takeaway

"Maintenance and repair" language on a CAM statement does not make an expense a maintenance or repair cost. The label is assigned by the landlord. The determination is made by your lease.

Three things to look for on every CAM reconciliation:

Any single line item over your lease's per-incident repair cap. If your lease caps repairs at $10,000 per incident and you see a $40,000 HVAC line, that warrants a documentation request.
Line items with the word "replacement," "restoration," or "renewal" in the description. These words signal scope that may qualify as capital expenditure.
Sudden spikes in a specific maintenance category. Roof, HVAC, elevator, and parking lot resurfacing are the four most common vectors for CapEx pass-through.

Your lease's audit rights clause gives you the right to request supporting invoices and contractor bids. Exercise it.

Frequently Asked Questions

How do I tell if a roofing charge is a repair or a capital expenditure?

The distinction depends on scope and lease language, not the label on the invoice. A repair maintains the existing system in its current condition — patching a leak, replacing a few damaged sections. A capital improvement replaces, extends the useful life of, or substantially upgrades a building system. Most leases define this explicitly, often with a dollar threshold per incident. Signs of a replacement: full tear-off and reinstallation, new decking or substrate work, a manufacturer's warranty on the new system, or a building permit filed with the county.

What documentation should I request to support a CapEx dispute?

Ask for the original contractor's bid or proposal (scope of work section is critical), the final invoice with line-item breakdown, any building permits or permit applications, and the warranty documents for the completed work. Warranties are particularly useful because a 15- or 20-year warranty is a clear indicator of new installation, not maintenance. CAMAudit's documentation request letter template prompts for all of these.

Can the landlord amortize a capital improvement and pass a portion through CAM?

Sometimes. Some leases allow the landlord to amortize capital expenditures over the useful life of the improvement and pass the annual amortized portion through CAM. This is a lease-specific provision — if your lease doesn't authorize it, it's not permitted. If your lease does allow amortization, the charge must be properly structured: only the amortized annual portion (not the full cost), calculated over the correct useful life, with documentation available on request. Running the full $180,000 through in a single year — as happened in this case — is not amortization regardless of what the landlord calls it.

Case Study: $180,000 Roof Replacement Billed as a CAM Operating Expense