CAM Audit Risk Score
10 questions · 2 minutes · Instant results
A CAM audit risk assessment scores your portfolio's vulnerability to tenant audit challenges based on operational factors like reconciliation frequency, gross-up tracking, lease abstract completeness, and historical error rates. Higher-risk buildings should be prioritized for proactive reconciliation review.
Question 1 of 10Expense Classification
How do you classify borderline capital vs. operating expenses in your CAM pool?
Frequently Asked Questions
What triggers a tenant CAM audit?
Common triggers include: year-over-year expense increases exceeding 5–10%, new property management, tenant auditor outreach campaigns, lease renewal negotiations, and tenant complaints about billing. Larger tenants with audit rights clauses are more likely to exercise them.
How much does a tenant CAM audit cost the landlord?
Direct costs include staff time to compile records (typically 20–40 hours per audit), legal review if disputes escalate, and potential refunds if errors are found. Tenant auditors typically work on 15–33% contingency, meaning they keep a portion of any overcharges they identify.
Can landlords prevent tenant CAM audits?
Landlords cannot prevent audits when the lease grants audit rights, but proactive reconciliation significantly reduces audit risk and exposure. Catching errors before the tenant’s auditor does eliminates the contingency fee and demonstrates good-faith billing practices.
What is a CAM audit right clause?
A CAM audit right clause is a lease provision giving tenants the right to inspect the landlord’s books and records related to operating expenses. Most commercial leases include some form of audit right, typically with a 12–24 month lookback window and requirements for CPA-conducted reviews.