What a CAMAudit Report Looks Like

[Tenant Name]

[Tenant Address]

Phoenix, AZ 85044

[Tenant Email]

Date: [Date]

[Landlord / Property Manager Name]

[Landlord Company Name]

[Landlord Address]

Phoenix, AZ 85044

Re: CAM Reconciliation Statement, 2024 Reconciliation Year

Property: Riverside Retail Plaza, 4821 Commerce Blvd, Phoenix, AZ 85044

Subject: Request for Cooperative Review of Identified Discrepancies

Dear [Landlord / Property Manager Name],

I hope this letter finds you well. I appreciate the ongoing business relationship we share and the care that goes into preparing the annual CAM reconciliation. I am writing in reference to the 2024 CAM reconciliation statement for my tenancy at Riverside Retail Plaza.

After receiving the 2024 reconciliation, I conducted a careful review using an automated audit tool that compared each billed charge against the cost recovery provisions in my lease. That review identified five line items that appear, on their face, to be inconsistent with those provisions. The combined apparent discrepancy totals $12,347.00 allocated to my tenancy.

I want to be clear that I am not suggesting any errors were intentional. Reconciliations of this complexity involve many moving parts, and I am writing in a spirit of transparency and mutual accuracy. I am hopeful we can review the relevant documentation together and reach a shared understanding.

FINDING 1: Management Fee Overcharge

Amount at Issue: $4,278.43

My lease, Section 7.3(b), caps the management fee at five percent (5%) of gross operating expenses. The 2024 reconciliation billed a management fee at 7.2%, resulting in a building-wide overcharge of $52,690.00, of which my pro-rata share (8.12%) is $4,278.43.

Lease provision: "Management fees shall not exceed five percent (5%) of gross operating expenses for the calendar year, exclusive of capital expenditures." (Section 7.3(b), p. 34)

FINDING 2: Pro-Rata Share Error

Amount at Issue: $4,013.44

My lease, Section 3.1, defines my proportionate share as 3,200 SF divided by 39,408 SF, equal to 8.12%. The 2024 reconciliation applied a share of 9.87%, computed using a denominator of 32,420 SF. The incorrect denominator inflated every CAM category I was billed for by 1.75 percentage points.

Lease provision: "Tenant's proportionate share shall be a fraction, the numerator of which is the rentable area of the Premises (3,200 square feet) and the denominator of which is the total rentable area of the Building (39,408 square feet)." (Section 3.1, p. 12)

FINDING 3: CAM Cap Violation

Amount at Issue: $2,856.55

My lease, Section 9.2(c), caps year-over-year increases in controllable operating expenses at four percent (4%), non-cumulative. Controllable CAM increased from $1,256,400.00 in 2023 to $1,341,835.20 in 2024, a 6.8% increase that exceeds the cap by 2.8 percentage points. My share of the excess is $2,856.55.

Lease provision: "Controllable Operating Expenses in any Lease Year shall not increase by more than four percent (4%) over the amount of Controllable Operating Expenses for the immediately preceding Lease Year. This cap is non-cumulative." (Section 9.2(c), p. 41)

FINDING 4: Capital Expenditure Included in CAM

Amount at Issue: $155.88

My lease, Section 9.1(d), expressly excludes capital expenditures from operating expenses. The 2024 reconciliation includes $1,919.70 allocated to common area CAM for a roof replacement project totaling $22,750.00. Roof replacement is a capital expenditure and should not appear in the CAM pool.

Lease provision: "Operating Expenses shall exclude capital expenditures, including but not limited to the cost of any capital improvement, capital repair, or replacement of any structural component or major building system." (Section 9.1(d), p. 39)

FINDING 5: Insurance Overcharge

Amount at Issue: $1,042.70

The total insurance premium allocated to tenants ($112,840.00) appears to exceed the proportionate cost of insuring the building and common areas as contemplated by my lease, Section 6.4. The excess may reflect coverage for non-common areas or adjacent parcels. I would appreciate documentation of the underlying policy to verify the allocation.

Lease provision: "Tenant shall pay its proportionate share of landlord's cost of insuring the Building and the Common Areas against fire and other casualties." (Section 6.4, p. 26)

PROPOSED NEXT STEPS

I respectfully request a written response within thirty (30) days of the date of this letter. Specifically, I ask that you review the five items above and either (a) provide documentation supporting each charge as billed, or (b) issue a corrected reconciliation statement and credit my account for any confirmed overcharges.

I am committed to resolving this collaboratively and am happy to schedule a call or meeting at your convenience to discuss any of the items above.

Thank you for your time and attention to this matter.

Sincerely,

[Tenant Name]

[Title]

[Company]

[Phone]

[Email]