Your lease does not include the right to audit the landlord's operating expense records. Without audit rights, you have no way to verify that CAM charges, tax pass-throughs, and other operating expenses are accurate and fairly allocated.
By Angel Campa, Founder · Updated March 2026
Flagged when audit rights are set to false or when no audit rights provision is found in the lease.
Industry studies consistently show that 60% to 80% of CAM reconciliation statements contain errors, with average overcharges ranging from 5% to 15% of total pass-through costs. For a tenant paying $25,000 annually in CAM charges, a 10% overcharge equals $2,500 per year or $25,000 over a 10-year term. Without audit rights, tenants have no mechanism to identify or recover these overcharges. In one documented case, a retail tenant discovered $180,000 in cumulative overcharges over seven years — but only because their lease included audit rights.
Insist on explicit audit rights in your lease with at least 180 days to dispute CAM reconciliation statements. Require the landlord to provide itemized operating expense records upon request, including invoices and contracts for major expense categories. Negotiate that if the audit reveals overcharges exceeding 5% of total CAM, the landlord pays the cost of the audit. Include a provision for retroactive recovery of overcharges for the full lease term, not just the current year.
It is difficult to add audit rights after lease execution. Your best opportunity is during lease renewal negotiations or when the landlord requests a lease amendment for other purposes. Some tenants successfully negotiate audit rights by offering a longer renewal term in exchange.
Industry research indicates that 60% to 80% of CAM reconciliation statements contain at least one error. Common issues include double-counting expenses, including capital expenditures that should be excluded, and miscalculating pro-rata shares.
CAM audits are typically performed by specialized commercial real estate auditing firms. These firms work on a contingency basis (taking a percentage of recovered overcharges) or for a flat fee. Expect to pay $3,000 to $10,000 for a comprehensive audit.
A practical guide to CAM reconciliation for commercial tenants and property managers. Covers audit rights, common overcharges, and dispute resolution.
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