Lease compliance & CAM audits
CAM audits and lease compliance reviews for commercial tenants
A California CPA practice for real estate accounting. We review lease reconciliations, CAM charges, and operating expense billings, and we document what the lease actually supports.
The practice
Noting where the lease doesn't match the charges
The primary work
Lease compliance and CAM audits
For commercial tenants, we examine the annual reconciliation your landlord issues against the language of your lease and the underlying expense records. The work is documentary: every finding is tied to a specific lease provision and a specific supporting schedule, so it can be raised and answered on paper.
What the review covers
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Overcharges
Charges that exceed what the lease permits, whether by amount, category, or the period in which they were billed.
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Pro rata share errors
Denominator and numerator errors in your proportionate share, including changes to the rentable area of the building or the tenant mix.
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Base year issues
Whether the base year was set and applied correctly, and whether expenses already captured in the base year were billed to you again.
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Expense cap violations
Caps on controllable or aggregate operating expenses, including compounding and carry-over mechanics where the lease provides for them.
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Gross-up errors
The gross-up of variable expenses to a full-occupancy basis, and whether the method used matches the method the lease requires.
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Improperly billed capital costs
Capital items, replacements, and improvement costs that were amortized or passed through when the lease did not permit it.
Also available
Other real estate accounting services
For engagements that do not call for a CAM review, the practice also provides the following.
How it runs
From documents to findings
- 01
Scoping
We identify the property, the lease, and the reconciliation period, and confirm what records are available.
- 02
Document review
We abstract the relevant lease provisions and reconcile the charges against them.
- 03
Findings
You receive a written memo with each item stated, quantified where the records allow, and supported by schedules.
- 04
Follow-up
We answer questions on the findings and support the discussion with your landlord or their accountant.
Start with the most recent reconciliation
Send the lease and the last reconciliation you received. That is usually enough to say whether a fuller review is worth doing.