Lease audit services: what they cost, what they check, and when to hire one
A lease audit service is a third-party review of the charges your landlord bills under a commercial lease, primarily Common Area Maintenance (CAM) and operating expense reconciliations. The goal is straightforward: verify that every line item matches what your lease actually permits. According to Tango Analytics, 40% of commercial CAM reconciliations contain material billing errors.
Key takeaways
- Lease audit services review CAM and NNN operating expense reconciliations for billing errors
- The most common errors are management fee overcharges, pro-rata share miscalculations, and excluded costs billed anyway
- Big Four CPA firms charge $16,000 to $56,000 per engagement; boutique contingency firms take 33% of recovery; AI platforms charge a flat fee starting at $179
- Most commercial leases grant a 12 to 24-month window to dispute a reconciliation after the statement date
- You do not need a CPA to audit CAM charges; the math is deterministic and the exclusions are written into your lease
What is a lease audit service?
A lease audit service reviews a landlord's annual reconciliation statement against the terms of the underlying lease. This is not a financial statement audit or an accounting review in the PCAOB sense. It has nothing to do with public company disclosures or auditor independence standards. It is a forensic review of Common Area Maintenance charges billed to a commercial tenant.
The core deliverable is a findings report that identifies specific line items where the landlord's billing exceeds what the lease permits, quantifies the dollar amount of each overcharge, and provides the supporting evidence needed to dispute the balance.
Lease audit services cover:
- CAM reconciliations in net and modified gross leases, where tenants pay a share of building operating expenses
- NNN (triple net) reconciliations for office, retail, and industrial tenants paying taxes, insurance, and maintenance separately
- Operating expense audits for gross leases with pass-through provisions or expense stops
- Base year resets, where the landlord's selection of a base year shifts more cost to the tenant than the lease permits
The output of a lease audit service is a written findings report, line-item evidence supporting each finding, and (in most cases) a dispute letter draft to send to the landlord or property manager.
What does a lease audit service check?
A thorough lease audit service examines every major category of error that appears in commercial CAM reconciliations. The most common categories, and the ones that yield the largest dollar recoveries, are:
Management fee overcharge. Most leases cap the property management fee at 3 to 5% of eligible CAM expenses. Landlords routinely apply the fee to a broader expense pool than the lease permits, or simply calculate the percentage incorrectly.
Pro-rata share error. Your share of building expenses is calculated as your rentable square footage divided by the total leasable area. If the landlord uses the wrong denominator (excluding anchor tenants or vacant suites improperly, for example), you overpay on every line item.
Excluded service charges. Every lease has an exclusions section listing costs the landlord cannot bill to CAM: capital improvements, executive salaries, leasing commissions, legal fees for landlord disputes, and above-standard services. Landlords sometimes bill these anyway, either intentionally or because property management software does not flag them.
Gross-up violation. For multi-tenant buildings, variable expenses like janitorial and utilities are often "grossed up" to a 95% occupancy equivalent so tenants pay a consistent share regardless of actual occupancy. Gross-up provisions in leases are specific about which expense categories qualify and at what occupancy threshold. Errors here tend to compound year over year.
CAM cap violation. Many leases include year-over-year caps on controllable expense increases, typically 3 to 5%. Landlords sometimes apply the cap to the wrong base, exclude the wrong expenses from the cap calculation, or compound incorrectly.
Base year error. For leases with expense stops or base year provisions, the landlord's selection of the base year and the expenses included in it directly determines how much you pay in future years. An inflated base year means lower future charges; a deflated one shifts more cost to the tenant.
Insurance overcharge. Commercial property insurance is a legitimate CAM expense, but premiums must stay within what the lease permits. Some landlords bill umbrella policies that cover assets beyond the subject property, or charge insurance riders that benefit only the landlord.
Tax overallocation. Property tax is almost always passed through in full under NNN leases. Errors here involve how the landlord allocates taxes across tenants, whether tax appeal refunds are credited back, and whether special assessments that benefit only part of the property are allocated to all tenants.
CAMAudit's platform runs 20 detection checks across these categories automatically, returning findings in under 15 minutes after uploading a lease and reconciliation statement.
How much do lease audit services cost?
The cost of a lease audit service depends almost entirely on which provider category you choose. There are four categories, each with a different pricing model and a different minimum viable CAM spend to justify the investment.
| Provider category | Typical cost | Breakeven CAM spend |
|---|---|---|
| Big Four accounting firms | $16,000 to $56,000 per engagement | $500,000+ annually |
| Boutique tenant representation firms | 33% of recovery | $60,000 to $100,000+ annually |
| BPO / portfolio lease administration | $10,000 to $100,000/yr subscription | Multi-location portfolios |
| AI audit platforms (e.g., CAMAudit) | $179 flat fee | $10,000+ annually |
Big Four accounting firms
Deloitte, KPMG, PwC, and EY all offer lease audit services under their real estate advisory practices. They charge $400 to $700 per hour blended, with a 40 to 80-hour minimum for a full review. Total engagement fees run $16,000 to $56,000 before any recovery work.
Springbord reports tenants can recover 15 to 20% of billed CAM charges when errors are found. At a 15% recovery rate, the breakeven against the minimum $16,000 engagement fee requires at least $107,000 in annual CAM. At the high end of the fee range ($56,000), the threshold rises to $373,000. In practice, Big Four firms focus on tenants with $500,000 or more in annual CAM who need signed opinion letters for investor or regulatory purposes.
Boutique tenant representation firms
Specialty firms like OAG, ReCon, and regional CRE advisory boutiques typically work on contingency: they take 30 to 40% of whatever they recover. This eliminates upfront cost but creates a high floor on the recovery needed to make the engagement worthwhile.
At 33% contingency and a 15% recovery rate, a tenant needs at least $60,000 in annual CAM for the economics to pencil. Boutique firms are a good fit for tenants with material CAM spend who do not want to pay upfront but can tolerate a slower timeline (4 to 12 weeks).
AI audit platforms
Software-based audit services charge a flat fee per audit regardless of CAM amount. CAMAudit charges $179 for a full audit with a dispute letter draft included. At a 15% recovery rate, a tenant with $10,000 in annual CAM recovers $1,500 on a $179 investment.
This is the only category with a viable unit economics model for the large majority of commercial tenants, who pay between $10,000 and $100,000 per year in CAM and have no traditional provider willing to serve them at a reasonable cost.
For a full guide to outsourcing a commercial lease audit, including how to evaluate firms, negotiate contingency terms, and decide when software covers the same ground for less, see outsourcing a lease audit: provider guide for commercial tenants.
When should you hire a lease audit service?
The timing of a lease audit matters because most commercial leases include an audit rights clause with a dispute window. The most common provision gives tenants 12 to 24 months after the landlord delivers the annual reconciliation statement to dispute the charges.
Hire a lease audit service when:
- You have received a CAM reconciliation statement within the past 12 months
- Your lease includes an audit rights clause (check Section 4 or 5, or search for "audit rights" in the document)
- Your annual CAM exceeds $10,000
- Your lease term is ending and you want to settle any outstanding overcharges before returning the space
- Your landlord has made major building improvements in the past two years, which sometimes get misclassified as operating expenses
Do not wait if:
- You received a reconciliation statement more than 18 months ago: the dispute window may have closed
- Your lease is expiring within 60 days: you need findings before the landlord applies the security deposit
The audit rights clause in most commercial leases allows tenants to inspect the landlord's records supporting the reconciliation. A professional lease audit service will know how to exercise this right and what documentation to request.
How to evaluate a lease audit service
Not all lease audit services deliver the same output. Before hiring one, ask these questions:
What deliverables do I receive? A complete lease audit service should provide a written findings report identifying each overcharge, the dollar amount, and the specific lease provision the landlord violated. You should also receive supporting calculations and a dispute letter draft ready to send to the landlord.
What is your methodology? Traditional providers review the landlord's general ledger and vendor invoices. AI platforms extract data from the lease and reconciliation statement and run deterministic rule checks. Both approaches are valid; what matters is that the provider can explain which rules they check and show their work.
What are your fees? Watch for contingency-only firms with no fixed floor on their take. If the recovery is small (say, $3,000 on a $20,000 CAM bill), a 33% contingency arrangement means the firm earns $1,000 and you net $2,000. A flat-fee platform at $179 produces better economics at this scale.
How long does it take? Traditional firms take 4 to 12 weeks. AI platforms return results in minutes. If your dispute window is closing, timeline matters.
CAMAudit was built to fill the gap that exists for tenants paying $10,000 to $150,000 per year in CAM, where no traditional lease audit service offers viable economics. The platform runs 20 automated checks, returns findings in under 15 minutes, and includes a dispute letter draft for $179 flat with no contingency or account required to start.
Frequently Asked Questions
What is a lease audit service?
A lease audit service is a third-party review of a commercial landlord's CAM (Common Area Maintenance) or operating expense reconciliation statement. The auditor compares each billed charge against the tenant's lease terms to identify overcharges, excluded costs billed improperly, and calculation errors. The output is a findings report and typically a dispute letter draft for recovering overcharged amounts.
How much does a lease audit service cost?
Lease audit service costs vary by provider type. Big Four accounting firms charge $16,000 to $56,000 per engagement and are viable only for tenants with $500,000 or more in annual CAM. Boutique contingency firms take 30 to 40% of any recovery and are viable at $60,000 or more in annual CAM. AI audit platforms like CAMAudit charge a flat fee starting at $179 and are viable for any tenant paying more than $10,000 per year in CAM.
What does a lease audit service typically find?
The most common findings are management fee overcharges (fee calculated on a broader expense pool than the lease permits), pro-rata share errors (wrong denominator used for allocation), excluded services billed to CAM (capital improvements, executive salaries, legal fees), gross-up violations, and CAM cap violations. According to Tango Analytics, 40% of commercial CAM reconciliations contain material billing errors.
When is it too late to hire a lease audit service?
Most commercial leases include a dispute window of 12 to 24 months after the landlord delivers the annual reconciliation statement. Once that window closes, the tenant generally cannot contest the charges. Review your lease's audit rights clause for the specific deadline. If you received a reconciliation statement more than 18 months ago, check the clause immediately before assuming the window is still open.
Do I need a CPA to audit my CAM charges?
No. CAM reconciliation audits are not financial statement audits and do not require a CPA license. The work involves reading a commercial lease, identifying permitted and excluded expenses, and verifying arithmetic. A CPA credential adds credibility for litigation or regulatory contexts, but for a standard tenant-side dispute, it is not required. AI platforms can perform the same rule-based checks automatically.
What is the difference between a lease audit and a CAM audit?
The terms are often used interchangeably for the same service. "CAM audit" typically refers specifically to a review of Common Area Maintenance charges in a net or modified gross lease. "Lease audit" is a broader term that can include operating expense audits, base year reviews, and NNN reconciliation reviews. Both involve the same core process: comparing billed charges against lease terms to identify overcharges.
Ready to find out if your CAM statement has errors? Run a free audit at CAMAudit in under 15 minutes, no account needed. For a full breakdown of provider categories, see our CAM audit company comparison.