Read time 3 minIn commercial leasing, tenants rely on landlords for various services, such as utilities, parking lot maintenance, landscaping, janitorial services, security, snow removal, and upkeep of common areas (elevators, hallways, sidewalks). These services are part of the operating expenses landlords recover through Common Area Maintenance (CAM) charges. CAM expenses are typically calculated based on the tenant’s pro-rata share of the leasable area. However, the process of accounting for CAM charges can be complex and time-consuming.
CAM charges are often a source of contention in commercial leases, primarily because there is no universally standardized practice for what constitutes CAM expenses and how they should be calculated. Oversimplifying these charges can lead to errors, and numerous factors contribute to discrepancies in calculations. As a result, tenants may find themselves faced with unexpected costs, which can lead to disputes and, in some cases, legal action.
Outsourcing CAM audit can help address these issue
Timely CAM audit done year-on-year can help tenants evaluate every aspect of CAM calculation including pro rata share, floors, caps, and base amount as well as each item included within the CAM invoice. Auditing allows tenants to identify whether or not CAM expenses are charged and estimated as per the lease terms.
That said, given the complexities of commercial leases and accounting practices, CAM audits are difficult and tedious. It includes gathering every relevant document and bills, analyzing each expense item, and verifying them with the lease terms to ascertain validity. Given the demanding nature of the audit it is important to outsource CAM audit services to certified consultants. Third-party experts bring expertise, industry experience and best practices that can help conduct a thorough and extensive review of CAM charges.
Benefits of Outsourcing CAM Audits
One of the most effective ways to address discrepancies in CAM charges is to outsource CAM auditing to certified professionals.
Outsourcing CAM audits to professionals offers tenants a cost-effective way to access expert assistance for all their CAM-related concerns. Engaging a CAM audit service early in the process offers several key benefits:
- Minimize Occupancy Costs: Identifying billing errors, discrepancies, and any misalignment with lease terms can help tenants reduce their overall costs.
- Ensure Fair Pricing: CAM audits can highlight unauthorized charges, hidden expenses, or errors, ensuring the CAM invoice is compliant with lease terms and reflects accurate costs.
- Uncover Cost Savings: Auditors may uncover opportunities to recover overpaid amounts and correct errors that might have otherwise gone unnoticed.
A thorough CAM audit not only helps tenants save on costs but also empowers them to negotiate refunds and provides a clear audit trail, which is crucial if billing inaccuracies arise. Additionally, landlords benefit from outsourcing CAM audits by reducing legal and financial risks and speeding up dispute resolution.
Ensure that your CAM invoice is accurate and reflects only what you are responsible for paying. Contact us to learn how we can help both tenants and landlords save costs, reduce financial and compliance risks, and foster stronger tenant-landlord relationships.
Why You Need the Right CAM Audit Service Provider
When dealing with CAM charges, it’s important to choose the right CAM audit service provider to make sure everything is accurate and fair. Commercial leases can be complicated, and understanding how CAM charges are calculated can be tricky.
That’s where an experienced CAM audit service provider can help.
- A reliable CAM audit service provider knows the ins and outs of CAM charges. They will carefully review all the expenses related to common area maintenance to ensure tenants only pay for what is outlined in the lease. They will check details like the tenant’s share of the space, caps, base amounts, and each item listed on the CAM invoice.
- Working with a CAM audit service provider can save tenants money by finding mistakes, overcharges, or charges that don’t align with the lease. This helps avoid misunderstandings or disputes with landlords.
- A professional CAM audit service provider can also help tenants recover money they may have overpaid and provide a clear record of the audit. This can be helpful if there’s ever a need to address billing issues.
Conclusion: The Importance of a Good CAM Audit Service Provider
Choosing the right CAM audit service provider is an important step in making sure your CAM charges are accurate and fair. Outsourcing this task to experts gives tenants peace of mind, reduces the risk of overpaying, and helps ensure everything is in line with the lease terms. Whether you’re a tenant or a landlord, working with a trusted CAM audit service provider makes the process easier and helps maintain a positive relationship between all parties.
