What This Liability Means

CAM (Common Area Maintenance) overcharges occur when landlords include unauthorized expenses, incorrectly calculate tenant's proportionate share, gross up expenses improperly, or fail to exclude capital items from the CAM pool. Industry studies suggest overcharges are endemic.

Dollar Example: 5,000 sq ft tenant in a 50,000 sq ft building, landlord grossing up to 100% occupancy when building is 80% occupied

Real Dollar Example

Scenario5,000 sq ft tenant in a 50,000 sq ft building, landlord grossing up to 100% occupancy when building is 80% occupied
Exposure$8,000-$15,000 in annual overcharges

Your 10% share of actual CAM is correct. But gross-up to 100% inflates the CAM pool by 25%, and your 10% of the inflated pool creates a fraudulent overcharge every year.

Worst Case Scenario

A multi-year audit revealing $40,000 in cumulative overcharges — money already paid that may only be partially recoverable depending on audit window limitations.

Warning Signs in Your Lease

  • Landlord refuses to provide detailed CAM expense breakdown upon request
  • Year-over-year CAM increases significantly exceed building occupancy or inflation rates

How to Limit This Liability

  • Exercise audit rights annually — don't wait for the lease to expire
  • Cap annual CAM increases at 5% to limit growing errors over time

Frequently Asked Questions

How common are CAM overcharges?
Studies suggest 50-70% of commercial leases contain CAM calculation errors. Most are not intentional — they result from complex reconciliation formulas applied inconsistently. But the effect is the same: you overpay.
What types of CAM overcharges are most common?
Gross-up inflation (calculating your share at 100% occupancy when building is partially vacant), inclusion of non-permitted items (capital improvements, management fee overcharges above contractual cap, leasing commissions), and incorrect proportionate share calculation.
What is the audit window and why does it matter?
Your lease specifies how long you have to audit CAM statements — typically 90 days to 2 years after receiving the reconciliation statement. Miss the window and the statement is typically deemed accepted, even if it was wrong.
How do I initiate a CAM audit?
Send written notice of audit intent within the audit window. Request all supporting documentation: invoices, contracts, expense allocations, and occupancy calculations. Most professional CAM auditors work on contingency.
What does it cost to hire a CAM auditor?
Professional CAM auditors typically charge 30-40% of amounts recovered — if they find nothing, you owe nothing. For a potential $20,000 recovery, the audit costs $6,000-$8,000. Most auditors only take cases with significant lease terms remaining.