Your NNN lease does not specify how often the landlord must reconcile estimated operating expense payments against actual costs. Without a defined reconciliation frequency, the landlord can delay reconciliation indefinitely, collecting estimated payments that may significantly exceed actual expenses without any obligation to settle up.
By Angel Campa, Founder · Updated March 2026
Flagged when the reconciliation frequency is null and the lease structure type contains "NNN."
Landlords typically collect estimated CAM payments monthly, often padding estimates by 10% to 20% to ensure they are not out of pocket. On $30,000 in annual CAM charges, a 15% over-estimate means the landlord collects $4,500 more than actual costs each year. Without a required reconciliation, this overpayment accumulates year after year. Over five years, a tenant could overpay by $22,500 or more with no mechanism to force a true-up. In extreme cases, tenants have discovered cumulative overpayments exceeding $50,000 when they finally demanded an accounting at lease expiration.
Require annual reconciliation of operating expenses within 90 to 120 days after each calendar year ends. Specify that if the landlord fails to deliver the reconciliation statement within the required timeframe, estimated payments are deemed actual and no additional charges can be assessed for that year. Require that any overpayment be credited to the tenant's next monthly payment or refunded within 30 days. Include a provision that the tenant may request interim reconciliation statements quarterly for informational purposes.
CAM reconciliation is the process of comparing estimated monthly operating expense payments against actual expenses incurred during the year. The landlord prepares a statement showing total actual expenses, the tenant's pro-rata share, and the difference between actual and estimated payments. The tenant either receives a credit or owes additional payment.
The industry standard is annual reconciliation, delivered within 90 to 120 days after the end of each calendar year. Some sophisticated tenants negotiate quarterly interim statements for budgeting purposes, with a final annual reconciliation.
If your lease specifies a reconciliation deadline, the landlord is in breach if they miss it. Send written notice demanding reconciliation. If the lease includes language deeming estimates as actual upon missed deadlines, cite that provision. As a last resort, you may need to engage an attorney to compel compliance or withhold future estimated payments.
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