Washington's 6-year SOL gives tenants a strong CAM recovery window. Seattle office and Bellevue retail tenants face gross-up and management fee overcharges.
TL;DR: Washington's 6-year SOL (RCW 4.16.040) covers reconciliations back to 2020. Seattle office tenants at 50 to 65 percent occupancy face gross-up overcharges on fixed costs. Bellevue retail tenants should check pro-rata denominators in anchor-heavy centers. Act before 2020 reconciliations become time-barred.
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CAM Overcharge
A CAM overcharge occurs when a landlord bills a tenant for common area maintenance costs that exceed what the lease permits, whether through incorrect math, improper cost categories, or flawed pro-rata share calculations.
Washington's six-year statute of limitations for written contracts is one of the stronger windows on the West Coast, particularly relevant given the Seattle metro's large tech office tenant base and Bellevue's high-volume retail corridor. The state has no dedicated commercial CAM statute. Contract law governs, and Washington courts enforce lease terms as written. Seattle's office market, affected by remote work and significant sublease availability since 2020, has produced a class of tenants paying full CAM on buildings running at 50 to 70 percent occupancy, which creates substantial gross-up overcharge exposure.
“Seattle's office market went through a dramatic occupancy swing after 2020, and I built CAMAudit to catch exactly what happens next: landlords applying gross-up as if buildings are at 95% when they are running at 60%. Washington's six-year window means tenants can recover three to four years of those compounding gross-up overcharges.”
Washington has no statute specifically governing commercial tenant CAM audit rights. The Washington Residential Landlord-Tenant Act (RCW 59.18) applies to residential tenancies only. Commercial leases in Washington are governed by general contract law under the common law of contracts and the Uniform Commercial Code where applicable.
Washington courts enforce commercial lease terms as written. Ambiguous terms are interpreted against the drafter, which can favor tenants in disputes over undefined CAM categories or unclear exclusion language. Landlord-drafted lease forms in Washington's commercial market frequently use broad CAM definitions and narrow exclusion lists, giving landlords substantial discretion in what is billed to tenants.
Washington has no mandatory records production statute for commercial CAM disputes. Tenants must rely on their lease's audit rights clause to compel record production, or on litigation discovery if the landlord refuses. Tenants in leases that are silent on audit rights have a general contract law right to demand records as a party with a financial interest in the accuracy of the charges, but enforcement requires litigation.
RCW 4.16.040 provides a six-year limitations period for actions upon any written contract. Washington commercial leases are written contracts, and CAM overcharge claims are breach of contract claims. The six-year period applies.
Washington applies the occurrence rule for contract claims: the SOL begins when the breach occurs, not when it is discovered. For CAM overcharges, the breach occurs when the reconciliation containing the improper charge is delivered to the tenant. The Washington Supreme Court has applied this rule strictly in commercial contexts.
Key implication: A reconciliation delivered in February 2020 has a limitation deadline of approximately February 2026. Washington tenants with unaudited reconciliations from 2020 through 2025 have a narrowing window to recover overcharges from those years.
Washington courts enforce lease-defined dispute windows as contractual conditions. The six-year statutory period is the outer limit, but a lease provision requiring written objection within 30 to 90 days of receiving the reconciliation is a separately enforceable condition. Missing the lease window can waive dispute rights for that year.
One notable feature of some Seattle-area tech office leases is a "final reconciliation" clause that makes the year-end reconciliation "binding and conclusive" unless objected to in writing within a specified period. Washington courts have enforced these clauses, which can make the lease-defined window more critical than the statutory SOL.
Seattle's Belltown, South Lake Union, Capitol Hill, and Eastlake office corridors house a large concentration of technology company tenants, most in modified gross or NNN lease structures in Class A and Class B office buildings. The post-2020 occupancy decline in Seattle office created specific CAM overcharge conditions:
Gross-up violations at low occupancy. Seattle office buildings were running at 50 to 65 percent occupancy through much of 2021 to 2023. Many leases include a gross-up provision normalizing variable expenses to 95% occupancy. At 60% actual occupancy, a 95% gross-up multiplies every variable expense by 1.58 (95/60). Applied correctly, this is limited to genuinely variable costs like janitorial, utilities, and parking management. Applied incorrectly to fixed costs like property taxes and insurance, it becomes a systematic overcharge. CAMAudit's Rule 5 (Gross-Up Violation) checks which expenses were grossed up and whether each was eligible under the lease.
Management fee on gross-up base. Some Seattle office leases permit a management fee on grossed-up expenses rather than actual expenses. This means the management fee is calculated on the inflated gross-up number, not the actual cost. A management fee on actual variable expenses of $600,000 at 4% is $24,000. The same fee on a grossed-up base of $950,000 is $38,000. CAMAudit's Rule 3 (Management Fee Overcharge) checks whether the management fee base is authorized by the lease.
Bellevue's downtown retail and the Eastside regional malls represent a high-volume retail market with premium rents and active CAM billing. Bellevue retail CAM issues most commonly involve:
Pro-rata share denominator manipulation. Several Bellevue retail centers have large anchor tenants (department stores, Costco, Target) that either pay fixed CAM or maintain their own areas. The denominator used to calculate inline tenant shares should exclude these anchor GLA positions per the ICSC standard. When the denominator includes anchor GLA that is not contributing to the expense pool, inline tenants pick up a smaller share than they should, which sounds favorable but is actually a misallocation that can flip depending on which cost center is at issue. More commonly, Bellevue tenants see their denominator artificially reduced by excluding excess vacant anchor positions, inflating their share. CAMAudit's Rule 4 addresses this.
Base year errors in newer Bellevue retail. Several Bellevue retail properties opened during high-vacancy periods between 2018 and 2022. Base year expense stops set during low-occupancy opening years often understate the baseline, making every subsequent year appear as an inflated increase. CAMAudit's Rule 7 (Base Year Error) evaluates whether the base year reflects normalized building operations.
A 12,000 SF technology company tenant in a South Lake Union office building, eight-year modified gross lease with 2019 base year. Building occupancy dropped to 62% in 2021 and remained at 65% through 2023.
Operating expense over base history:
| Year | Building Actual OpEx | Grossed-Up OpEx (95%) | Tenant Share (4.8%) | Correct Tenant Share |
|---|---|---|---|---|
| 2021 | $2,400,000 | $3,677,419 | $176,516 | $115,200 (on actual) |
| 2022 | $2,550,000 | $3,730,769 | $179,077 | $122,400 |
| 2023 | $2,620,000 | $3,833,333 | $184,000 | $125,760 |
The gross-up in 2021 included $680,000 in property taxes and $240,000 in insurance, both fixed costs that do not vary with occupancy. Grossing up those fixed costs at 95/62 inflates them to $1,480,645, adding $800,645 to the expense pool. This tenant's 4.8% share of that unauthorized addition: $38,431 per year.
Recovery calculation (6-year Washington SOL):
| Category | Annual Overcharge | Years | Total |
|---|---|---|---|
| Gross-up on fixed costs (taxes + insurance) | $38,431 avg | 3 (2021-2023) | $115,293 |
| Management fee on grossed-up base | $6,800 | 3 | $20,400 |
| Total estimated recovery | $135,693 |
This is a significant recovery that CAMAudit flagged via Rules 5 and 3 in a single analysis run.
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Find My Overcharges| Statute | Description | Link |
|---|---|---|
| RCW 4.16.040 | Six-year statute of limitations for written contracts | Washington State Legislature |
| RCW 59.18 | Washington Residential Landlord-Tenant Act (residential only) | Washington State Legislature |
For the full state-by-state SOL comparison, see the CAM Overcharge Lookback by State guide.
For the complete framework on commercial tenant audit rights, see the How to Dispute CAM Charges guide.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed Washington attorney for advice specific to your situation.
Further reading: