Security is one of the most disputed CAM line items. Learn the common benefit test, how landlords inflate security charges, and what to do when security costs are misallocated.
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Find My OverchargesSee a sample report firstSecurity is one of the top five most disputed line items in commercial CAM reconciliations. Landlords routinely bundle tenant-specific security expenses into the pool, charge for enhanced services that were never requested, and bill armed guard contracts without documentation. The result is an overcharge that looks like a routine line item on a 40-row spreadsheet.
CAMAudit flagged security overcharges in roughly 1 in 4 reconciliations we analyzed during beta. The average overcharge was $8,200 per year per tenant. That adds up fast across a multi-year lease.
The core issue comes down to one test: does the security expense benefit the property as a whole, or does it benefit a specific tenant?
Courts and lease arbitrators apply a "common benefit" test to determine whether a security expense is includable in CAM. The expense must serve the general tenant population and protect the shared property. It cannot be a service that primarily or exclusively benefits one occupant.
Standard security expenses that typically pass the test:
Expenses that typically fail the test:
The key language in most leases: "security services for the common areas." If your lease says that and the landlord bills you for a guard stationed at another tenant's dock, that guard is not a common area service.
This is the most common pattern. A large anchor tenant (a bank, a pharmacy, a 24-hour fitness center) negotiates dedicated security patrols as part of their lease. Those costs get folded into the CAM pool and allocated across all tenants. You end up paying for security you never needed or requested.
Security contracts in the $50,000 to $200,000 range are rarely bid competitively. Landlords sometimes use related-party security firms at inflated rates. Your lease may require competitive bidding for major contracts. Many do not.
After a theft or break-in, landlords often upgrade security systems substantially. These upgrades can be legitimate CAM expenses or they can be capital expenditures that should be amortized. The distinction matters. A new surveillance system costing $80,000 may need to be spread over its useful life, not expensed entirely in year one.
Building has 8 tenants, total CAM pool of $400,000. Security line item: $60,000. Of that $60,000:
Your pro-rata share is 12%. Correct security allocation: $35,000 x 12% = $4,200. Billed amount: $60,000 x 12% = $7,200. Overcharge: $3,000 for this line item alone.
Across a five-year lease, that is $15,000 in overcharges from one line item.
If the landlord cannot provide vendor contracts and invoices, that is a documentation failure. Most audit rights clauses entitle you to that information.
No. Vague language does not override the implied common benefit requirement. Courts have consistently held that CAM charges must benefit the tenant paying them. If your lease is silent on the scope of "security costs," argue the common benefit test applies. The landlord has the burden of showing the expense benefits the property as a whole.
It depends on whether it is a capital expenditure or a repair. A brand-new surveillance system covering the entire property may be a capital item under your lease. If so, it should be amortized over its useful life, not expensed in the year of installation. Check your lease's capital expenditure exclusion language.
Sometimes. New owners frequently reassess property security and upgrade systems. But a tripling of security costs in year one of new ownership is a red flag. You should request documentation showing what changed, what was bid, and whether any costs are tenant-specific or capital in nature. See also: CAM charges after a building sale.
A CAM cap limits your total annual CAM increase, so it partially protects you regardless of what is inside the pool. But it does not correct the underlying error. You may still want to dispute the security charges because: (1) reducing the pool lowers your base for future year calculations, and (2) if you sell or assign the lease, the inflated base travels with you.
Yes. General audit rights cover all CAM line items including security. The audit right lets you inspect the books and records supporting the reconciliation. Security contracts and invoices are part of that record.
CAMAudit's detection engine flags security line items that show year-over-year increases above 15% and cross-references them against CAM pool size to identify tenant-specific allocation patterns.
See also: Excluded Services in CAM Charges, for the full list of expense categories that commonly get improperly included.
Related: What Is Included in CAM Charges | Vacant Suite Improvements in CAM