What is a CAM reconciliation? The true-up, explained
A CAM reconciliation is the landlord's yearly statement comparing what you paid in monthly estimates for common area maintenance, real estate taxes and insurance with what those costs actually came to. The difference is billed to you or credited back. That settling up is called the true-up.
Why there is a reconciliation at all
In a net or triple net (NNN) lease you pay base rent plus your share of the property's operating costs. Nobody knows those costs in advance, so at the start of the year the landlord sets a budget, divides your share by twelve and adds it to each rent invoice. After the year closes, the landlord adds up the real costs and reconciles them against the estimates you paid. Your lease controls which costs can be passed through, how your share is calculated and when the statement is due.
What a reconciliation statement usually contains
- Expense pool by category: CAM (landscaping, cleaning, lighting, security, repairs, snow removal and so on), real estate taxes, insurance, and an administrative or management fee if the lease allows one.
- Your share: a fixed percent or your square feet over the center's leasable area.
- Your portion of each line: the pool multiplied by your share.
- Estimates paid: the total of the monthly estimates you were billed.
- Balance: the amount due from you, or the credit owed to you.
- New estimate: sometimes a revised monthly figure for the coming year, based on the actuals.
Worked example: the true-up, line by line
A hypothetical restaurant leases 2,400 square feet in a 60,000 square foot center. Its share is 2,400 / 60,000 = 4.0%. The lease allows a 10% administrative fee on CAM costs only, not on taxes or insurance. All figures below are illustrative.
| Line | Budget (whole center) | Actual (whole center) | Tenant's 4.0% of actual |
|---|---|---|---|
| CAM | $240,000 | $252,000 | $10,080 |
| Admin fee, 10% of CAM | $24,000 | $25,200 | $1,008 |
| Real estate taxes | $90,000 | $93,000 | $3,720 |
| Insurance | $30,000 | $36,000 | $1,440 |
| Total | $384,000 | $406,200 | $16,248 |
The estimates were based on the budget: $384,000 x 4.0% = $15,360 for the year, or $1,280 a month. Actual costs came to $406,200 x 4.0% = $16,248. The true-up is $16,248 minus $15,360 = $888 due from the tenant. If the next year's estimate is reset to the actuals, the monthly payment becomes $16,248 / 12 = $1,354.
How one error changes the bill
Now suppose the statement applies the 10% fee to the whole pool, taxes and insurance included, which this lease does not allow. The fee becomes 10% of $381,000 = $38,100 instead of $25,200. The pool rises to $419,100, the tenant's portion to $419,100 x 4.0% = $16,764, and the balance due to $16,764 minus $15,360 = $1,404. The difference is $1,404 minus $888 = $516, which is exactly 4.0% of the $12,900 extra fee. Nothing on the statement would announce it: the fee simply sits on a bigger base. This is why a reconciliation is worth checking line by line rather than only comparing the total to last year. The most common CAM overcharges follow the same pattern, and how to audit a CAM reconciliation walks through the checks in order.
Reconciliation, true-up and audit: the difference
| Term | What it is | Who does it |
|---|---|---|
| CAM estimate | The monthly amount billed with rent, based on the budget | Landlord |
| CAM reconciliation | The yearly statement comparing estimates with actual costs | Landlord |
| True-up | The balance from the reconciliation: an extra charge or a credit | Landlord bills or credits it |
| CAM audit | Checking the reconciliation against the lease, and objecting to what does not comply | Tenant, or someone acting for the tenant |
What to do when one arrives
- Write down the date it arrived. In many leases the objection deadline runs from receipt or from the statement date, and your lease controls which; see CAM audit rights and objection windows.
- Recompute your share and check it against last year's.
- Compare each category with last year and with the budget. Large jumps deserve a closer look, though they are not overcharges by themselves.
- Check the admin fee base, the cap and any capital items against the lease. The CAM overcharge benchmarks give the formulas.
- If something does not match the lease, object in writing before the window closes. The dispute guide has a letter template.
Questions
When do landlords send CAM reconciliations?
Timing varies. Many leases set a delivery deadline; your lease controls when it is due and what happens if it is late.
Is a CAM reconciliation the same as a CAM audit?
No. The reconciliation is the landlord's statement. An audit is the tenant's check of that statement against the lease.
What if the reconciliation shows a credit?
A credit still deserves a check. An overcharge can shrink a credit just as it can grow a balance due, and the lease decides whether the credit is refunded or applied to future rent.
Check your own reconciliation, free
Email your lease and the landlord's latest CAM reconciliation to audit@tenantback.com. Tenantback's agents check every line against the lease and send back each overcharge with the clause and the math, usually within minutes. No signup. If you then recover money through Tenantback, it keeps 25% of what comes back, and nothing otherwise.
Using ChatGPT or Claude? Connect https://tenantback.com/mcp and ask it to audit your statement.