By Gwen Kelly, Partner at Property Works
Gwen has been auditing occupancy costs for over 25 years.
Why CAM Overcharges Are a Costly Problem for Tenants
Common Area Maintenance (CAM) charges are a standard part of commercial leases, but without the right protections in place, tenants can end up paying thousands in unnecessary fees.
I’ll never forget the frustration of one client who came to us suspecting they were being overcharged for CAM expenses. Their costs had increased year after year, and they had no way of knowing if the charges were accurate.
The problem? Their lease agreement didn’t include an audit clause.
How a CAM Audit Clause Protects Your Business
Without an audit clause, tenants have no legal right to review the detailed breakdown of CAM expenses. This means:
- Landlords aren’t required to provide invoices or vendor contracts.
- Sudden cost increases go unchallenged due to lack of transparency.
- Tenants might be overpaying for vague or inflated charges.
When I requested invoices and contracts on behalf of my client, the landlord refused, stating that the lease did not require them to disclose those details. The tenant was left footing the bill—without any way to verify if the charges were fair.
Lease Audit Clause Example to Reduce CAM Overcharges
To protect yourself from overpaying, consider adding an audit clause to your lease. Here’s an example provision:
Landlord shall, on or before the 90th day following the end of each calendar year, deliver to Tenant a statement signed by Landlord certifying the true amount of the Common Area Maintenance Expenses for the calendar year just expired and the amount of Tenant’s Proportionate Share of the Common Area Maintenance Expenses and payments made by Tenant during such calendar year under this Lease. Landlord’s statement shall include an itemization of such Common Area Maintenance Expenses and, if requested by Tenant in writing (email accepted), copies of all invoices, contracts, tenant rosters, site plans, or other such items deemed necessary to substantiate the true amount of the Common Area Maintenance Expenses.
This clause ensures that tenants have access to financial records, allowing them to challenge discrepancies and prevent overcharges.
Key Takeaways: Protect Your Bottom Line with This Lease Clause
A CAM audit clause is one of the most powerful tools for avoiding hidden fees in commercial leases. Before signing a lease, make sure you:
- Negotiate the inclusion of an audit clause.
- Request itemized statements of CAM expenses.
- Ensure your lease gives you access to supporting documents.
Take Control of Your Lease Expenses
Don’t wait until unexpected charges pile up—protect your business today. If you need expert guidance on negotiating a lease or reviewing CAM expenses, contact our team today.
