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CAM Reconciliation Demand Letters: What's Required Before You Can Collect

By Angel Campa, Founder, CAMAudit

Quick Answer

A CAM reconciliation demand letter is the formal written notice a landlord sends before suing a tenant for an unpaid CAM balance. In Florida it is a statutory condition precedent to litigation. In California, it cannot precede the landlord's compliance with SB 1103 documentation obligations. One template does not work across states.

When a Demand Letter Is Legally Required, By State

The assumption that you can send a demand letter whenever you choose is wrong in several states. The pre-suit requirements attached to commercial lease collection actions vary significantly, and the cost of getting them wrong is dismissal.

1

Florida: 30-Day Written Demand Is a Condition Precedent

Florida courts have held that a written demand is an absolute legal condition precedent to bringing a civil action for unpaid amounts under a contract. Under the framework applied in commercial lease enforcement, and consistent with Florida Statutes §501.98 governing unfair trade practices, a landlord who files suit without first delivering a written demand risks having the action dismissed before it reaches the merits. The demand must give the tenant at least 30 days to respond and must identify the specific amount claimed and the basis for it. Courts have dismissed actions on this ground even when the underlying CAM charges were valid and undisputed.

2

Texas: Strongly Encouraged; Required for Small Claims

Texas does not impose a blanket statutory demand requirement for commercial lease collection in district court, but the practical standard is the same. Texas Law Help and the Texas Justice Court Training Center confirm that a written demand is a prerequisite for small claims court jurisdiction in contract disputes. In district court, the absence of a demand letter becomes a good-faith argument for the tenant and affects the attorney's fees analysis: Texas courts consider pre-suit conduct when awarding fees, and failure to demand before suing weighs against the prevailing party recovering fees. For any CAM balance below $20,000, assume the demand is mandatory.

3

California: SB 1103 Documentation Must Come First

In California, the sequence matters as much as the letter itself. For Qualified Commercial Tenants under Civil Code §1950.9, including microenterprises, small restaurants, and nonprofits, the landlord cannot pursue collection until the tenant's written documentation request has been answered within 30 days with a compliant package: itemized primary-source invoices, an explicit allocation tabulation, and a signed landlord attestation. Sending a demand letter before satisfying that obligation does not start a collection clock; it creates counter-liability. The CalLawyers.org analysis of SB 1103 confirms that courts may award treble damages where landlords pursue collection without first meeting the production obligation. See the full SB 1103 compliance guide for production requirements.

What a Valid Demand Letter Must Contain

The content requirements vary by state, but there is a defensible baseline that holds across jurisdictions. The most common reason demand letters fail in court or before it is not bad math. It is missing attachments.

Required content

  • • Unambiguous statement of the specific lease breach, citing the CAM reconciliation clause and the reconciliation period
  • • Precise dollar amount owed: gross balance, any amounts already paid, and the net amount demanded
  • • Itemized reconciliation statement as an attachment, not a summary: the full calculation
  • • Copy of the relevant lease provisions: the CAM clause, the reconciliation provision, and the payment obligation
  • • Clear resolution path: amount to pay, where to send it, and the deadline (typically 30 days)
  • • Delivery method that creates a paper trail: certified mail, overnight courier with signature confirmation, or email with read receipt where the lease permits

Common omissions that invalidate it

  • • Missing the lease contract itself: Florida Statutes require the contract accompany the demand; many landlords attach only the statement
  • • No itemized backup: a one-line balance due figure attached to a demand letter does not satisfy the 'itemized billing statements' requirement
  • • Wrong statutory notice period: using a 10-day payment window when the jurisdiction or lease requires 30 days voids the demand
  • • Sending to the wrong address: demand must go to the notice address in the lease, not the tenant's current business address if different
  • • Unsigned or unsigned by the wrong party: the letter must be executed by the landlord or an authorized representative with apparent authority

Florida Statutes require that the demand "be accompanied by the contract and itemized billing statements," language that courts have applied strictly. A demand that attaches a reconciliation summary but not the underlying invoices has been held insufficient in Florida circuit court decisions interpreting the condition precedent requirement.

Why Manual Demand Letters Create Legal Risk

Most property management companies handle demand letters with a single template, one Microsoft Word document modified for each tenant and sent whenever a balance goes unpaid. That process fails in three predictable ways.

State-specific requirements vary, and one template does not work in all states. Florida requires the lease contract and itemized billing statements as attachments. California requires that the documentation production obligation be satisfied before the letter goes out. Texas requires a specific notice period for small claims jurisdiction. A template built for one state produces a deficient demand in another.

Missing attachments can restart the pre-suit clock. If a demand letter is found deficient, whether for wrong attachments, wrong notice period, or wrong recipient, the landlord must re-send a corrected demand and wait out the full notice period again. On a 30-day notice requirement, a defective first demand adds another 30 days before litigation can begin. In leases with rent escalation provisions or monthly late fees, that delay carries a dollar cost beyond the legal risk.

No paper trail connecting the letter to the underlying reconciliation creates evidentiary gaps. A demand letter that references "amounts owed under the CAM reconciliation" without attaching the reconciliation data does not establish what was actually calculated, when, and from what source. If the tenant disputes the calculation in litigation, the landlord must reconstruct the reconciliation from whatever records exist. If the reconciliation system allowed modifications after finalization, or if records were deleted after the demand was sent, that reconstruction may be impossible.

How CAMAudit Generates Demand Letters

The documentation problem is the core of why manual demand letters are risky. CAMAudit addresses it at the source.

Once a reconciliation is finalized in CAMAudit, it is locked. The demand letter generated from that reconciliation pulls the exact figures from the locked record, the same numbers that produced the annual statement, with no opportunity for intervening modification. If the demand letter is ever challenged, the finalized record in the system is the evidentiary anchor.

The demand letter package includes the complete calculation trace: GL source data, gross-up factors by month, pro-rata denominator, cap application, and admin fee sequence, all organized as the itemized billing statements the Florida demand requirement and comparable state standards call for. The attachment is generated from the same data as the statement, not assembled separately.

For tenants flagged as Qualified Commercial Tenants under SB 1103, CAMAudit generates the signed landlord attestation required by Civil Code §1950.9 as part of the documentation package, before any collection action is initiated. This means the 30-day production obligation is met and documented before the demand letter sequence begins. See the SB 1103 compliance guide for how QCT attestation works and what the signed attestation must contain.

If a tenant responds to the demand by invoking their audit rights clause, the response protocol is covered in the tenant CAM dispute guide.

Generate a Demand Letter From Your Reconciliation Data

CAMAudit produces jurisdiction-aware demand letter packages from finalized, immutable reconciliation records, with itemized attachments included.

Generate a Demand Letter

Frequently Asked Questions

What is a CAM reconciliation demand letter?

A CAM reconciliation demand letter is a formal written notice from a landlord to a tenant stating that a specific dollar amount is owed under the CAM reconciliation clause of the lease, identifying the basis for the charge, and demanding payment within a specified period. It is distinct from the annual reconciliation statement itself; the demand letter is what converts an unpaid balance into a legal claim that can be enforced in court.

Is a demand letter required before suing a tenant for unpaid CAM?

It depends on the state. In Florida, a written demand is an absolute condition precedent to filing suit for unpaid CAM under most commercial lease enforcement contexts, and skipping it means the case can be dismissed before it starts. In Texas, a demand letter is strongly encouraged and required as a prerequisite for small claims court. In California, SB 1103-context disputes require the landlord to first respond to the tenant's documentation request before pursuing collection. Even where not strictly required by statute, demand letters are the standard pre-litigation step in virtually every jurisdiction.

What happens if a landlord skips the demand letter step?

In Florida, skipping the statutory written demand can be grounds to dismiss the lawsuit outright. The landlord must start over, losing time and court filing fees. In California SB 1103 contexts, attempting to collect before complying with documentation obligations creates counter-liability for the landlord, including treble damages. Even in states without a strict statutory requirement, courts look unfavorably on landlords who sue without first making a written demand, and tenants often raise the absence of a demand as a good-faith defense or use it to shift attorney's fees.

What should be attached to a CAM demand letter?

At minimum: the finalized CAM reconciliation statement for the year in dispute, an itemized list of all expenses included in the CAM pool, the pro-rata calculation showing the tenant's share, and the lease clause(s) authorizing the charges. In Florida, the statute requires the contract and itemized billing statements to accompany the demand. For California SB 1103 tenants, the full compliant documentation package, including primary-source invoices, allocation matrix, and signed landlord attestation, must be produced before or concurrent with any collection action.

How is a CAM demand letter different from a lease default notice?

A lease default notice invokes the default and cure provisions of the lease and typically opens a cure period during which the tenant can remedy the breach before the landlord can terminate. A CAM demand letter is narrower: it demands payment of a specific reconciliation balance and is the precondition for litigation to collect that balance. Some leases treat unpaid CAM as a default triggering default notice requirements; in those cases, both a default notice and a demand letter may be required. The two documents serve different legal purposes and are not interchangeable.

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