30-40% of CAM reconciliations contain billing errors. Most tenants pay without checking. Learn what to verify before you pay and how to dispute errors.
Think your lease might have this issue? Run a free CAM audit to check.
Find My OverchargesCheck if your reconciliation matches what your lease allows
Check if your reconciliation matches what your lease allows Most audits complete in under 15 minutes.
CAMAudit compares your statement against your lease terms and flags every gap before you pay.
Find My OverchargesSee a sample report firstCAM reconciliation is the annual settlement between estimated and actual common area maintenance charges in a commercial lease. Throughout the year you pay monthly CAM installments based on the landlord's budget. At year-end, the landlord tallies actual expenses, computes your proportionate share, and compares it to what you paid. If actuals exceeded estimates, you owe the balance. If estimates exceeded actuals, the landlord owes you a credit.
CAM reconciliation: CAM reconciliation is the annual settlement process in a commercial lease where a landlord compares estimated common area maintenance payments collected from tenants throughout the year against actual operating expenses incurred, resulting in either a balance-due invoice or a credit. Tango Analytics found material errors in 40% of commercial CAM reconciliations.
The process is also called a CAM true-up. Tango Analytics found that 40% of commercial CAM reconciliations contain material errors (cited by PredictAP, February 2026), meaning roughly four out of ten tenants who pay without reviewing are likely overpaying, sometimes by thousands of dollars per year, compounding across every lease term.
When you are ready to test your own statement instead of reading about the process, move next to what a CAM audit checks. For the full breakdown of what CAM charges cover and how they are calculated, see the CAM charges guide. If you want to preview how findings show up before you upload, review the sample report.
The reconciliation cycle runs once per year, typically on a calendar-year basis, and follows five stages:
Monthly estimates, you pay an estimated CAM installment each month based on the landlord's budget projection. This runs alongside base rent all year.
Year-end calculation, after December 31, the landlord closes the books on actual operating expenses. Property management software (Yardi, MRI, AppFolio) compiles every expense category that falls within the CAM pool your lease defines.
Pro-rata allocation, your share is your rentable SF divided by the total leasable area of the property. That percentage times total actual expenses equals your portion.
Reconciliation statement, the landlord prepares and delivers a document comparing what you paid against your actual share, showing the balance due or credit. Most leases require delivery within 90–180 days after year-end.
Settlement, you review the statement, dispute anything you believe is incorrect, and either pay the balance or receive a credit.
The prior-year reconciliation becomes the baseline for next year's estimates. An overcharged reconciliation sets a higher baseline, meaning errors compound forward if unchecked.
The annual CAM reconciliation statement document typically has several components:
Summary section: Total estimated payments collected, total actual expenses incurred, the difference, and the balance due or credit. This is what most tenants look at first, and stop at.
Expense detail: A line-by-line listing of categories included in the CAM pool: landscaping, janitorial, management fees, utilities, insurance, maintenance contracts, and others. This is where you check whether included categories match what the lease permits.
Pro-rata share calculation: Your space divided by the total leasable area of the property equals your percentage. That percentage multiplied by total actual expenses equals your portion. This section can contain errors in either the numerator (your square footage) or the denominator (what counts as "total leasable area").
Gross-up calculation (if applicable): If the property was below stabilized occupancy during the year, variable expenses may be grossed up. The gross-up should apply only to variable expenses (utilities, janitorial, some management fees), not to fixed expenses like property taxes or insurance.
Year-over-year comparison (sometimes): More sophisticated reconciliations show prior-year figures. Significant year-over-year jumps in specific line items warrant scrutiny.
Most statements are generated by property management software (Yardi, MRI, AppFolio) from the property's general ledger. This is both efficient and error-prone: GL coding decisions made by entry-level accountants determine what lands in your CAM pool, and those decisions are rarely audited against the lease's inclusion and exclusion language.
The specific expenses that can appear in your CAM pool depend on your lease's CAM definition. As a general framework:
| Typically Included | Often Excluded |
|---|---|
| Property taxes | Capital improvements |
| Property insurance | Leasing commissions |
| Landscaping and snow removal | Legal and accounting fees (non-operational) |
| Common area utilities | Marketing costs |
| Janitorial and cleaning | Executive salaries |
| Parking lot maintenance | Financing costs and ground lease payments |
| Security services | Owner-specific expenses |
| Property management fees | Above-market management fees |
The table is a general guide, your lease is the controlling document. If your lease explicitly excludes an item that appears in your reconciliation, that item is a disputed charge. If your lease is silent on something, whether it qualifies as includable CAM expense depends on industry custom and applicable law, which is where attorneys and CPAs add value.
The 40% error rate is not an accident. It is a structural feature of how CAM reconciliations are produced.
Yardi, MRI, and similar platforms give landlords extensive control over how expenses are coded and allocated. Entry-level property accountants make GL coding decisions daily that, over time, migrate costs from non-recoverable to recoverable CAM buckets. These errors are rarely intentional. They are the product of complex systems operated by people who do not always read the lease.
Under U.S. GAAP, capital improvements must be depreciated over their useful lives. A $400,000 parking lot resurfacing should generate roughly $40,000 per year in amortized cost over 10 years, not $400,000 charged to the CAM pool in a single year. When CapEx hits the reconciliation as a single-year operating expense, every tenant in the building overpays significantly that year. When errors are extensive enough that the entire statement cannot be relied upon, tenants have grounds to formally reject the CAM reconciliation statement rather than disputing individual line items, which triggers different obligations on the landlord to produce supporting documentation.
Most leases cap management fees at a percentage of a defined base: controllable expenses, gross revenues, or total operating expenses. When the fee is calculated on a broader base than the lease permits, or when admin fees are stacked on top without disclosure, the dollar charge exceeds what the lease allows even if the stated percentage looks correct. The management fee overcharge guide walks through the exact formula and how to catch this error.
Gross-up provisions protect tenants in a partially vacant building from carrying disproportionate utility and janitorial costs. They are supposed to adjust variable expenses only. Applying gross-up to property taxes, insurance premiums, or landscaping contracts inflates the CAM pool with costs that would not actually change at full occupancy.
Before paying any CAM reconciliation balance, work through these checks:
Match expense categories to your lease. Every line item in the reconciliation should be a category your lease permits. Flag anything that resembles capital expenditures, leasing costs, or owner-specific expenses.
Verify your pro-rata share percentage. Confirm your square footage in the numerator. Check what the denominator includes, anchor tenant exclusions, occupied vs. total leasable area, and BOMA measurement standard all affect the denominator.
Audit the management fee. Find your lease's management fee provision. Calculate the maximum permitted fee using the base and percentage the lease specifies. Compare to the actual charge.
Check gross-up application. If the reconciliation includes a gross-up adjustment, verify it is applied only to variable expenses (utilities, janitorial, some HVAC). Fixed costs should not enter the gross-up calculation.
Test the CAM cap. If your lease has a year-over-year CAM increase cap, calculate whether the current-year charges comply. The cap may be cumulative or compounded, the formula differs.
Look for year-over-year anomalies. Compare this year's expense categories against last year's reconciliation. A line item that jumps 30% or appears for the first time warrants an explanation.
Note your dispute deadline. Your lease specifies how many days you have to dispute the reconciliation after delivery. Mark that date the moment the statement arrives, it functions like a contract statute of limitations. When you find errors, a CAM dispute letter draft template gives you the structure to formally assert your claim.
For a line-by-line verification walkthrough, see the CAM reconciliation review checklist.
When tenants escalate beyond basic review, two professional disciplines typically get involved.
CPAs and forensic accountants approach a CAM reconciliation as an expense audit. They request the full general ledger backup, occupancy records, and vendor invoices. They map each reconciliation line item against the lease's CAM definition, calculate the correct management fee and gross-up using the formulas the lease specifies, and run year-over-year variance analysis to identify expense categories with unexplained swings. The 14 detection rules that CAMAudit automates map directly to this forensic framework. For tenants who want to understand what a CAM audit actually checks before engaging any professional, that guide covers the full scope.
For a detailed breakdown of the CPA engagement process, see CAM reconciliation for CPAs: what commercial lease auditors check.
Commercial real estate attorneys evaluate whether identified errors constitute a breach of the lease and whether that breach is worth pursuing. They review audit rights clauses, assess statutes of limitations, and advise on whether to pursue settlement through a dispute letter draft or formal litigation. They also evaluate the "account stated" doctrine risk, the legal principle that can limit your ability to dispute a reconciliation you paid without objection.
For the legal framework, see CAM reconciliation disputes: a legal guide for CRE attorneys.
CAM reconciliation disputes follow patterns that vary by property type.
The most common issues are anchor tenant exclusions that reduce the denominator without corresponding expense reductions, management fee overcharges, and CAM cap violations in multi-tenant strip centers. Anchor departure, when a large tenant vacates, is the single biggest source of unexpected CAM share increases for remaining tenants.
Gross-up violations are frequent here because office buildings often operate at below-95% occupancy during economic downturns. Capital expense misclassification also appears often, given the volume of HVAC, elevator, and building systems capital spending in Class A and B office properties.
HVAC costs are disproportionately high in medical office buildings and are a frequent dispute category. Tenants should also watch for utility billing methodologies that charge them for more than their actual consumption.
Property tax allocation and insurance passthrough legitimacy are the primary dispute categories. Single-tenant industrial leases sometimes include property-specific costs that belong to the landlord rather than the tenant.
For industry-specific benchmarks and overcharge patterns, see the industry guides section.
What is CAM reconciliation?
CAM reconciliation is the annual process that settles the difference between estimated common area maintenance payments you made throughout the year and your actual proportionate share of the property's operating expenses. If actuals exceeded your estimates, you owe a balance. If your estimates exceeded actuals, you receive a credit.
How often is CAM reconciliation performed?
CAM reconciliation is performed annually, typically within 90–180 days after the end of the calendar year or lease year. Most leases require delivery by March 31 or April 30. If your lease specifies a deadline and the landlord misses it, the landlord may be in breach of the lease.
What is the difference between CAM estimates and CAM reconciliation?
CAM estimates are the monthly payments you make throughout the year based on the landlord's budget projection for that year. CAM reconciliation is the year-end accounting that compares those estimates to actual expenses. The reconciliation determines whether your estimates were too high (credit to you) or too low (balance due from you).
What expenses are included in CAM reconciliation?
Includable expenses depend on your lease's CAM definition. Common inclusions are property taxes, property insurance, landscaping, janitorial, common area utilities, parking lot maintenance, security, and property management fees. Common exclusions are capital improvements, leasing commissions, marketing costs, and owner-specific expenses. Your lease controls what is and is not includable.
How long do I have to dispute a CAM reconciliation?
The dispute window is defined in your lease, typically 30 to 180 days from the date the reconciliation statement is delivered. Some leases give you 12 to 36 months if they include an explicit audit rights clause. If you miss the deadline without objecting, you may lose the right to dispute under the account stated doctrine. Mark the deadline the day the statement arrives.
What is a CAM true-up?
CAM true-up and CAM reconciliation refer to the same process, the annual settlement of estimated versus actual CAM expenses. Some landlords use 'true-up' specifically to describe the revised monthly estimate set for the new year based on prior-year actuals. Others use both terms interchangeably.
Can my accountant audit the CAM reconciliation?
Yes. Most commercial leases include an audit rights clause that gives tenants the right to inspect the landlord's books and records supporting the CAM reconciliation. A CPA or forensic accountant can review the general ledger, occupancy records, and vendor invoices to verify the reconciliation is accurate. The audit window specified in the lease limits how far back you can go.
What happens if I don't pay the CAM reconciliation balance?
Withholding payment without a formal dispute can put you in default under most commercial leases. The correct approach is to pay the undisputed portion by the deadline while sending a formal dispute letter within the dispute window for charges you believe are incorrect. This protects your legal position without triggering a default.
Is annual CAM reconciliation required by law?
No federal or state statute requires annual CAM reconciliation in commercial leases. The obligation is contractual, it exists because your lease requires it. Most NNN and modified gross leases include a reconciliation provision. If your lease does not include one, the landlord has no obligation to reconcile, and you have no right to demand it.
When do landlords send CAM reconciliation statements?
Most NNN leases require the landlord to send the annual CAM reconciliation within 90 to 180 days after year-end, meaning most statements arrive between January and April. No state in the U.S. imposes a universal statutory deadline for commercial CAM reconciliation delivery. The timing is governed by the lease. If your lease says 'within 120 days of year-end' and you receive the reconciliation in June, the landlord is in default of the lease.
What happens if the reconciliation shows a credit?
If actual CAM expenses were lower than your monthly estimates, you overpaid during the year and the reconciliation shows a credit. Depending on the lease, the credit may be applied to next year's monthly estimates, applied to the next rent payment, or refunded in cash. Review your lease to see which mechanism applies. Some leases allow the landlord to roll credits forward indefinitely, which effectively delays the economic benefit to the tenant.
Can I audit a CAM reconciliation myself?
Yes, to a point. You can check the math, verify that included categories match your lease, and confirm the pro-rata share calculation using public square footage records. The hard part is tracing individual line items back to vendor invoices and verifying that capital expenditures haven't been buried in operating categories. That typically requires requesting the full general ledger backup from the landlord and having someone who knows CAM accounting review it.
What is a gross-up in CAM reconciliation?
A gross-up is an adjustment that recalculates variable operating expenses as if the building were at a specified occupancy level, typically 90–95%. The purpose is to prevent a single tenant from absorbing a disproportionate share of costs in a partially vacant building. Gross-up should apply only to variable expenses like utilities and janitorial, not to fixed costs like property taxes or insurance. Applying gross-up to fixed costs is a common and material reconciliation error.
What is cam reconciliation in commercial real estate?
CAM reconciliation in commercial real estate is the annual settlement process between estimated and actual common area maintenance charges in NNN and modified gross leases. Throughout the year, tenants pay monthly CAM installments based on the landlord's budget. At year-end, the landlord tallies actual operating expenses, calculates each tenant's proportionate share, and compares that amount to the estimates paid. If actuals exceeded estimates, the tenant owes a balance. If estimates exceeded actuals, the landlord owes the tenant a credit.
What is the definition of common area maintenance in a lease?
The common area maintenance clause in a commercial lease defines which building operating expenses the landlord can pass through to tenants. It typically specifies the categories of includable expenses (such as landscaping, janitorial, utilities, insurance, and management fees), the categories explicitly excluded (such as capital improvements, leasing commissions, and owner-specific expenses), the formula for calculating each tenant's proportionate share, and any caps or limits on year-over-year increases. The CAM clause is the controlling document for any billing dispute.
Understanding reconciliation statements:
Finding and fixing errors:
Dispute and recovery:
