Commercial tenants pay thousands of dollars each year in common area maintenance charges. A CAM audit is the process of reviewing those charges against your lease terms to identify billing errors, unauthorized expenses, and calculation mistakes that could be costing your business money.
What Is a Commercial CAM Audit?
A commercial CAM audit compares the expenses listed on your landlord's CAM reconciliation statement against the terms defined in your lease agreement. The goal is to verify that every charge passed through to you is permitted under your lease, calculated correctly, and properly allocated.
Most commercial leases include provisions governing what expenses landlords can include in CAM charges, how those expenses are shared among tenants, and what limits or caps apply. An audit checks whether the landlord's billing aligns with those provisions.
Common CAM Overcharges
CAM overcharges are more common than most tenants realize. Without a systematic review, these discrepancies often go undetected year after year. Here are some of the most frequent issues identified in commercial CAM audits:
- Inflated management fees — Landlords may charge administrative or management fees that exceed the percentage cap defined in the lease. A fee listed at 8% when the lease caps it at 5% results in a direct overcharge.
- Incorrect pro rata share calculations — If your tenant share percentage is calculated using the wrong square footage or an incorrect total leasable area, every expense line item will be inflated.
- Capital expenses billed improperly — Lease agreements often exclude capital improvements from CAM charges. When landlords include items like roof replacements or parking lot resurfacing, tenants may be paying for expenses their lease does not permit.
- Maintenance vs. capital confusion — There is often a gray area between routine maintenance and capital expenditures. Landlords may categorize capital work as maintenance to pass costs through to tenants under CAM provisions.
How LeaseGuard Performs a CAM Audit
LeaseGuard automates the CAM audit process so commercial tenants can review their charges without hiring a consultant or spending weeks on manual analysis. Here is how the process works:
- Upload your lease and CAM reconciliation statement — Upload a PDF of your commercial lease (specifically the CAM or operating expense section) along with one or more annual CAM reconciliation statements from your landlord.
- LeaseGuard analyzes clauses and expenses — The system extracts key lease provisions including CAM caps, admin fee limits, excluded expense categories, and pro rata share terms. It then compares each billed expense against those provisions.
- The system flags potential discrepancies — You receive a report identifying charges that may exceed lease limits, expenses that appear to be excluded under your lease terms, and calculation inconsistencies.
Learn more about the full audit process in our guide to auditing CAM charges.