CAM reconciliation errors do two kinds of damage: they leave recoverable costs uncollected, and they invite tenant disputes and audits. These are the seven we see most—and how to avoid each.
1. Mixing capital expenditures into operating expenses
Capital improvements (a new roof, a parking lot replacement) usually can't be passed through as CAM, or must be amortized. Dropping them into the operating pool is the fastest way to get a reconciliation challenged. Keep capital and operating costs in separate pools from day one.
2. Ignoring lease caps
Many leases cap how much controllable CAM can rise each year. Bill above the cap and you'll be issuing credits later—or worse, eroding trust. Caps must be tracked per lease, not per building.
3. Forgetting exclusions
Negotiated exclusions (management-fee limits, anchor-tenant carve-outs, certain repairs) vary lease by lease. Applying a single expense pool to every tenant ignores them and overcharges some tenants.
4. Skipping or misapplying the gross-up
The occupancy gross-up should apply only to variable costs. Grossing up fixed costs—or skipping the gross-up entirely in a partly-vacant building—both produce the wrong number.
5. Using the wrong pro-rata denominator
Pro-rata share can be based on total or occupied square footage depending on the lease. Using the wrong denominator quietly shifts costs to the wrong tenants.
6. Thin backup documentation
Tenants have the right to question charges. If you can't produce a clean, line-item audit trail behind every pool, disputes drag on and often end in concessions.
7. Missing the reconciliation deadline
Bill the true-up after the lease's deadline and you may lose the right to collect it. This is pure lost revenue—and entirely avoidable.
The common thread
Reconcile with confidence
Plazee enforces per-lease caps and exclusions and keeps a full audit trail behind every figure.
Start Free TrialFrequently asked questions
What are the most common CAM reconciliation errors?
The most common errors are mixing capital expenditures into operating expenses, ignoring lease caps and exclusions, forgetting the occupancy gross-up, using the wrong pro-rata denominator, and missing the lease’s reconciliation deadline.
Why do CAM reconciliations get disputed?
Disputes usually come from charging excluded or capital costs, math/cap errors, vague backup documentation, or sending the statement after the lease deadline—all of which are avoidable with consistent expense pools and an audit trail.