CAM Reconciliation Pre-Send Checklist
12 checks before you send anything
Disputes rarely come from bad intentions. They come from a December invoice that never got posted, a gross-up formula applied to the wrong accounts, or a BOMA denominator that hasn't been touched since 2017. Run this list before you send anything.
GL Exclusion Scrub
Remove CapEx from the recoverable pool
- Why:
- CapEx inclusions drive 30% of all CAM disputes (BOMA International). One roof replacement coded to the wrong account poisons the entire statement.
- Verify against:
- Lease exclusions clause; property CapEx schedule for the fiscal year.
Variable vs. Fixed Expense Classification
Separate variable expenses from fixed before running any gross-up
- Why:
- Gross-up can only legally apply to variable expenses. Applying it to fixed costs — landscaping, property taxes, insurance — is a breach of IREM standards and the first thing a forensic auditor checks.
- Verify against:
- IREM expense definitions; lease gross-up clause expense categories.
Gross-Up Calculation Audit
Variable expenses only, correct occupancy %, correct target from lease
- Why:
- A misapplied gross-up either contaminates the base year or inflates tenant bills. Both are recoverable by audit firms.
- Verify against:
- Gross-up clause target occupancy % (typically 95% or 100%); actual move-in/move-out occupancy log for the fiscal year.
Pro-Rata Denominator Reconciliation
Confirm building RSF basis matches the standard cited in the lease
- Why:
- Denominator errors compound across every line item — a wrong denominator creates 5–10% systemic variance across the entire rent roll.
- Verify against:
- BOMA standard cited in lease (1996 / 2010 / 2017 / 2024); most recent measurement certificate.
Mid-Year Occupancy Adjustment
Time-weight all SF changes for tenants who moved, expanded, or contracted
- Why:
- Applying year-end SF to the full 12-month period is a contractual breach. Audit firms find this in the first 30 minutes of any review.
- Verify against:
- Lease amendment execution dates; PM software tenant SF history report.
Pro-Rata Share Math
Confirm all shares sum to ≤100%
- Why:
- Shares above 100% means double-collecting. Shares below 100% means revenue leakage. Both are structural errors that surface immediately in any competent audit.
- Verify against:
- Sum of all tenant RSF ÷ building RSF denominator = ≤1.00.
Tenant-Specific Lease Exclusions
Remove exclusions before calculating, not after
- Why:
- Billing even one excluded expense invites a full forensic audit of the entire GL. The exposure is not limited to the single line item.
- Verify against:
- Lease abstract exclusions clause per tenant; Yardi/MRI recovery pool configuration per tenant ledger.
Cap Structure Verification
Apply the correct cap logic: cumulative vs. non-cumulative, controllable only
- Why:
- Misapplying a cumulative cap as non-cumulative (or the reverse) creates 5–15% billing errors. Tenants with sophisticated lease administrators will catch this immediately.
- Verify against:
- Cap clause language — base period, cumulative vs. non-cumulative, cap %; prior-year CAM actuals as the base.
Controllable vs. Uncontrollable Segregation
Taxes, insurance, and snow removal bypass the cap
- Why:
- Applying caps to uncontrollable expenses is a lease violation. Missing the carve-out for taxes and insurance is a landlord undercharge.
- Verify against:
- Lease cap clause definition of "controllable"; GL account mapping — taxes (GL 6XXX) vs. controllable maintenance.
Management Fee and Administrative Markup Audit
One fee, one calculation base, no corporate overhead in the pool
- Why:
- Duplicative management fee structures have produced $9M recoveries in single-lease audits. In Texas, undisclosed fee methods violate Property Code §93.012, rendering the entire assessment invalid.
- Verify against:
- Lease management fee clause (calculation base + % ceiling); GL management fee account contains only the third-party PM fee.
Vendor Invoice Completeness
Close AP before the statement closes — chase stragglers now
- Why:
- A December invoice posted in February cannot be back-billed in most leases. The landlord absorbs the shortfall permanently.
- Verify against:
- AP aging report filtered to prior fiscal year; active vendor contracts vs. posted invoices; year-end accruals.
Statement Delivery Deadline Verification
Know your billing window per tenant before you send anything
- Why:
- Missing the contractual billing window permanently forfeits the true-up balance. Sophisticated tenants will refuse payment citing landlord breach.
- Verify against:
- Reconciliation clause deadline per lease; delivery schedule sorted by earliest deadline across the rent roll.
Related Resources
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