Legal & Professional Fees: CAM Line Item Audit Guide

What Legal & Professional Fees Covers

Attorney fees, CPA fees, and other professional advisory costs incurred by the landlord span a wide range of activities, most of which have no connection to common area operations. Legal fees for lease negotiations, lease enforcement actions, eviction proceedings, acquisition due diligence, refinancing, and litigation against tenants all benefit the landlord exclusively. These costs are not common area expenses and are not recoverable from tenants under standard CAM provisions. The recoverable exception is narrow: legal fees incurred in connection with a matter that directly affects common area operations and benefits all tenants equally, such as a zoning dispute over a shared parking facility, may be recoverable depending on lease language. CPA fees to prepare the annual CAM reconciliation statement represent a particularly clear abuse. The reconciliation is a landlord administrative function, and its preparation cost is an overhead expense of the landlord's property management business, not an operating cost of the common areas. Standard exclusion lists in well-negotiated leases specifically identify "costs of preparing CAM reconciliation statements" as a non-recoverable item. When reviewing a reconciliation, any legal or professional fee line item should be treated as presumptively non-recoverable until the landlord can document that the underlying matter directly served the common area benefit of all tenants.