What This Liability Means

CAM reconciliation is the annual process of comparing actual CAM expenses to the monthly estimates tenants paid throughout the year. If actual expenses exceeded estimates, tenants owe the difference — often as a lump sum payment due within 30-60 days of receiving the statement.

Dollar Example: Tenant paid $1,200/month in estimated CAM ($14,400/year). Actual CAM expenses allocated to tenant: $21,000.

Real Dollar Example

ScenarioTenant paid $1,200/month in estimated CAM ($14,400/year). Actual CAM expenses allocated to tenant: $21,000.
Exposure$6,600 reconciliation payment due within 30 days

A 45% underestimate that creates a significant cash flow event in Q1 — exactly when many businesses are recovering from holiday season.

Worst Case Scenario

A NNN tenant with unlimited CAM exposure in a year with major building system repairs: $25,000 annual CAM estimate, $45,000 actual — a $20,000 reconciliation bill with 30 days to pay.

Warning Signs in Your Lease

  • CAM estimates that increase dramatically year-over-year without explanation
  • Reconciliation statement with minimal supporting documentation

How to Limit This Liability

  • Cap annual CAM increases at 5% regardless of actual expense increases
  • Dispute reconciliation statements within the audit window — overcharges are common

Frequently Asked Questions

When does the CAM reconciliation occur?
Landlords typically reconcile in Q1 — 60-90 days after the calendar year ends. You'll receive a reconciliation statement in February or March covering the prior year. The due date for payment is typically 30-60 days after receipt.
Can I get a CAM reconciliation extension?
You can request one, and most landlords will accommodate a 30-day extension if you're in dispute. But the payment obligation doesn't disappear — you owe the undisputed amount while disputing specific items.
What if I think the reconciliation is wrong?
Send a written dispute within the audit window. Request all supporting documentation (invoices, contracts, allocation calculations). Pay the undisputed portion while the dispute is pending — withholding the entire amount creates a default risk.
How do CAM caps affect reconciliation?
With a CAM cap, your reconciliation exposure is limited. Example: if actual CAM increases by 10% but your cap is 5%, you owe only the 5% — the landlord absorbs the remaining 5% increase. Caps protect against reconciliation surprises.
What happens if I can't pay the CAM reconciliation?
Non-payment of CAM reconciliation is typically a lease default — the same as non-payment of base rent. Don't ignore it. If cash flow is tight, negotiate a payment plan with the landlord before the due date.