The most common CAM overcharges, and how to spot them

Industry estimates put a material error in roughly 4 in 10 CAM reconciliations. Most fall into a handful of patterns. Each one below is a question you can answer with your lease and the statement.

1. Admin fee charged on excluded costs

The lease allows, say, a 10% administrative fee "on Common Area Maintenance costs, excluding real estate taxes, insurance and utilities". The statement applies 10% to the whole pool. On a typical strip center pool this alone can be several hundred to a few thousand dollars per tenant per year.

2. Capital replacements billed as maintenance

Roof replacement, parking lot reconstruction, new HVAC units and structural work are capital items. Most retail leases exclude them, or only allow amortized portions. Look for large one-off lines labeled "repairs" or "parking lot".

3. A shrinking denominator

Your share is your square feet over the center's leasable area. If the landlord leaves vacant, anchor or outparcel space out of the denominator without lease permission, every tenant's share grows. Compare the denominator year over year.

4. Cap breaches

Controllable CAM may only grow by the capped percent over the prior year (or over the base year, for a cumulative cap). Recompute the allowed amount and compare. Check which costs the lease treats as uncontrollable: usually taxes, insurance, utilities and snow removal.

5. Gross-up where it is not allowed

Gross-up adjusts variable costs as if the center were, for example, 95% occupied. If the lease does not permit gross-up, or only for variable costs, a grossed-up fixed cost is an overcharge.

6. Landlord overhead and leasing costs

Corporate salaries, off-site office rent, leasing commissions, marketing for vacant space and legal fees for disputes with other tenants are commonly excluded. They often appear as "management" or "professional fees".

7. Insurance deductibles and self-insurance

Many leases exclude deductibles above a cap, or premiums for coverage the landlord was not required to carry. Look at large jumps in the insurance line.

8. Math and late delivery

Totals that do not add up, credits for your estimated payments that are missing or wrong, and statements delivered after the lease deadline. Some leases bar the landlord from collecting on a late statement.

How Tenantback checks these

The audit agent extracts every line, classifies it against your lease's exclusion list, and a deterministic rules engine applies share, exclusions, cap, admin fee and gross-up in the right order. Each finding quotes the lease clause word for word and shows the calculation, so you or your landlord can verify it in seconds.

Questions

Which CAM overcharge is most common?

Admin and management fees charged on a base the lease excludes, and capital repairs billed as ordinary maintenance, are among the most frequent and the easiest to document.

Is a big year-over-year increase an overcharge?

Not by itself. It is a signal to check for capital items, a changed denominator or a cap breach.

Can I recover overcharges from previous years?

Sometimes. Some leases allow audits of prior years (a lookback); others make each statement binding once its window closes.