How Common Are CAM Overcharges? The Data
40% of CAM reconciliations across U.S. retail centers contain material errors. That's the finding from a Tango Analytics industry analysis cited by PredictAP in February 2026. These aren't minor rounding discrepancies, they're "material breaches of lease calculations that cumulatively cost the industry an estimated $15 billion annually in misallocated capital."
The rate is high enough that CAM overcharging shouldn't be treated as an anomaly. It's the norm. Most tenants never check, so most overcharges stay unrecovered.
The core data points
40% of reconciliations contain material errors (Tango Analytics, cited by PredictAP, "The $15 Billion Problem Hiding in Plain Sight," February 13, 2026). The analysis focused on U.S. retail center reconciliations.
28% of tenants discovered discrepancies independently. Per a JLL industry report cited by PredictAP and Springboard (2023, referenced 2025/2026): nearly 28% of tenants found discrepancies in their annual CAM reconciliations on their own. Only a small percentage pursued formal professional audits despite finding those discrepancies.
Tenants who audit recover 15–20% of billed charges on average. When tenants do engage professional lease auditors, industry analyses show average recovery of 15–20% of total billed CAM charges.
CAM represents 15–35% of total occupancy costs. According to BOMA data cited in industry analyses, CAM charges account for 15–35% of a tenant's total occupancy cost depending on property type and region. For a retail tenant paying $30/sqft in base rent and $10/sqft in CAM, CAM is 25% of their total rent obligation.
Why the rate is this high
The 40% figure isn't explained by intentional fraud. The structural causes are operational:
Property management software complexity
Your reconciliation is a data export from property management software, most likely Yardi, MRI, or AppFolio. These platforms process hundreds of thousands of expense transactions per property per year. Account coding decisions made by entry-level property accountants determine what ends up in the recoverable CAM pool.
Yardi's 7000-series accounts are supposed to contain only operating expenses. Capital accounts (8000-series) should not appear in the CAM pool. In practice, a roof replacement gets coded to an account that flows into the wrong recovery pool, and it hits every tenant's bill as an operating expense for that year. The error is often unintentional, and it happens at scale.
The lease-vs-accounting gap
The CAM definition in your lease was drafted by attorneys. The system configuration in the landlord's property management software was set up by IT and accounting professionals. These two groups often don't talk to each other. When the lease excludes "above-property management fees," someone has to configure the software to keep those fees out of the recoverable pool. That configuration step is frequently missed or done incorrectly.
Manual data entry and OCR failures
Vendor invoices come into the property management system through a mix of manual entry and OCR scanning. OCR failures and manual entry errors can miscategorize individual invoices, a capital improvement invoice scanned into an operating expense account, a contractor invoice for excluded services coded to a recoverable CAM account.
Year-end timing pressure
CAM reconciliations are typically prepared in January through March for the prior calendar year. This is the busiest period for property accounting teams. Errors made under time pressure tend to be less carefully reviewed before statements go out.
The types of errors that appear most often
Based on the structural sources of overcharging, the most common material error types are:
Capital expenditures charged as operating expenses. A $500,000 parking lot reconstruction or HVAC system replacement appears as a single-year operating expense. Under GAAP, it should be depreciated over its useful life, only the annual depreciation amount should flow into CAM, and many leases explicitly exclude capital expenditures entirely.
Management fee overcharges. The fee is calculated on the wrong base (e.g., including taxes and insurance in the revenue figure used for the percentage calculation), producing a fee that exceeds the lease cap even at the correct percentage.
Gross-up applied to fixed expenses. Variable expenses (utilities, janitorial) can legitimately be grossed up to stabilized occupancy. Fixed expenses (property taxes, insurance, landscaping) should not be, they don't change with occupancy. When gross-up is applied to fixed costs, the adjustment inflates the CAM pool with expenses that wouldn't increase even if the building were fully occupied.
Pro-rata share denominator errors. Using an occupied-only denominator rather than total GLA, or excluding anchor tenants from the denominator while including their portion of common area expenses, inflates in-line tenant shares.
CAM cap violations. Many leases cap annual increases in controllable CAM expenses at 3–5%. When property management software isn't manually configured to enforce these caps, they go unenforced and tenants pay above the contractual ceiling.
The recovery math
If you're in a 10,000 sqft space paying $6/sqft/year in CAM ($60,000/year total), and a professional audit finds overcharges averaging 17.5% of billed charges:
- Annual overcharge recovered: $60,000 × 17.5% = $10,500/year
- Over a 5-year look-back period: $52,500
- Over a 10-year lease: $105,000
The recovery is meaningful for most commercial leases. The reason more tenants don't audit is visibility, not math. Most tenants assume the reconciliation is correct, or they don't know they have the right to challenge it. Not sure whether the math works for your situation? Take the free assessment tool to find out in 2 minutes.
Who's most likely to find errors
Some tenants are more likely to have problematic reconciliations than others:
Large retail spaces in multi-tenant centers. The 40% figure comes from retail reconciliations specifically. Retail CAM is more complex than industrial CAM and involves more expense categories.
Tenants in recently acquired properties. When a building changes ownership, new management teams inherit old system configurations. Errors that the prior management team introduced may continue under the new owner.
Tenants who have never audited before. Landlords who know tenants audit routinely have some incentive to get the reconciliation right. Landlords who know their tenants never check have less operational pressure to catch errors.
Long-term tenants in buildings with prior management. Errors introduced early in a lease term compound. A tenant who has been in a space for 8 years and has never audited may have 8 years of accumulating overcharges to recover (subject to the statute of limitations).
What makes a CAM audit work
A professional CAM audit requires:
- The executed lease and all amendments
- The full general ledger for all CAM pool accounts for the year(s) being audited
- Vendor invoices for the top 10–15 expense line items by dollar amount
- The management fee calculation and supporting documentation
- The gross-up worksheet (if applicable)
- The pro-rata share calculation and denominator details
An auditor compares each expense line against the lease's CAM definition, checks the management fee against the lease cap and formula, verifies the pro-rata share denominator, and checks for any gross-up violations.
For a systematic walkthrough of what those checks look like, see the CAM Overcharge Detection Playbook.
Frequently Asked Questions
How often do landlords intentionally overbill CAM?
Intentional fraud in CAM billing exists but isn't the primary driver of the 40% error rate. Most errors result from account miscoding, software configuration issues, and the gap between lease language and accounting practice. Tenants who audit frequently find legitimate errors rather than deliberate fraud. The distinction matters less than the outcome, overcharges cost tenants money regardless of intent.
Is it worth auditing a small CAM reconciliation?
The value of auditing depends on the balance due, the size of your space, and how long you've been in the lease. For a $1,000 reconciliation on a small space in the first year of a lease, a formal professional audit probably doesn't pencil out. For a $10,000+ reconciliation on a larger space, or for any reconciliation at the end of a multi-year period, the average recovery rate makes an audit financially attractive.
What percentage of CAM audits find something?
No published data covers this precisely. The 40% error rate in Tango Analytics' analysis applies to reconciliations generally, meaning roughly 4 out of 10 would contain a material error worth disputing. Individual audit recovery rates of 15–20% of billed charges suggest that when auditors find something, it tends to be meaningful.
Do small businesses have the same CAM overcharge rate as large companies?
The error rate likely doesn't vary much by tenant size, it reflects landlord accounting and system practices, not tenant characteristics. However, large companies with dedicated real estate finance teams are more likely to audit routinely, which means smaller businesses who never audit may be sitting on more accumulated unrecovered overcharges.
Can I run a CAM audit myself without a professional?
A self-directed review can identify obvious errors: CapEx items, management fees that clearly exceed the lease cap, pro-rata percentages that don't match your lease. The harder-to-find errors, gross-up on fixed expenses, vendor invoice discrepancies, management fee base manipulation, typically require more specialized knowledge. CAMAudit's free audit automates the systematic forensic checks that would otherwise require a professional auditor.
Frequently Asked Questions
What percentage of CAM reconciliations contain billing errors?
Tango Analytics found that 40% of CAM reconciliations across U.S. retail centers contain material errors, not minor rounding discrepancies but breaches of lease calculations. Most tenants never check, so most overcharges remain unrecovered. Tenants who conduct professional audits recover an average of 15 to 20% of total billed CAM charges.
How much do tenants typically recover in a CAM audit?
Industry data from PredictAP (2026) shows average recovery of 15 to 20% of total billed CAM charges when an audit is conducted. On $60,000 per year in CAM, that is $9,000 to $12,000 annually. Over a 5-year lookback, the same error rate produces $45,000 to $60,000 in recoverable overcharges.
Why are CAM overcharges so common if they're not intentional fraud?
Most overcharges result from structural operational causes: account miscoding in property management software, the gap between lease language drafted by attorneys and accounting configurations set up by IT staff, OCR errors on vendor invoices, and year-end timing pressure when reconciliations are prepared. The 40% error rate reflects system and process failures, not deliberate fraud in most cases.
Are small businesses more likely to have CAM overcharges than large companies?
The error rate likely doesn't vary much by tenant size since it reflects landlord accounting practices, not tenant characteristics. However, large companies with dedicated real estate finance teams are more likely to audit routinely. Smaller businesses who never audit may be sitting on more accumulated unrecovered overcharges precisely because no one is checking.
Is it worth auditing a small CAM reconciliation?
For a $1,000 reconciliation on a small space in the first year of a lease, a formal audit probably doesn't pencil out. For a $10,000 or larger reconciliation, or for any reconciliation after multiple years in a space, the average 15 to 20% recovery rate makes an audit financially worthwhile. CAMAudit's $79 flat fee produces positive ROI on any annual overcharge above $200.
For a full breakdown of the 12 systematic error types that CAM auditors check, see the CAM Overcharge Detection Playbook. For context on the NNN lease structure and how CAM billing works, see the NNN Lease Tenant Guide. Ready to take action? Learn how to detect and recover CAM overcharges.
Run a free CAM audit to apply the same checks to your own reconciliation.