Most CAM disputes settle through negotiation when backed by solid audit evidence, but having a clear dispute resolution clause ensures you have escalation options.
A dispute resolution clause specifies the mechanism for resolving disagreements between landlord and tenant, including disputes over CAM charges. Common options include direct negotiation, mediation, arbitration, or litigation. The clause typically defines the process, timeline, location, and who bears the costs of resolution.
The dispute resolution mechanism directly affects your ability to challenge CAM overcharges effectively. Litigation is expensive and slow, potentially costing more than the overcharge you are trying to recover. Arbitration is faster but may limit discovery rights. The right mechanism ensures you can actually enforce audit findings without spending more on the process than you recover.
“Any dispute arising under this Lease, including disputes concerning Operating Expenses and reconciliation statements, shall first be submitted to good-faith negotiation between the parties for a period of thirty (30) days. If the dispute is not resolved through negotiation, either party may submit the dispute to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitration shall take place in the metropolitan area where the Property is located. The arbitrator shall have experience in commercial real estate matters. The prevailing party shall be entitled to recover reasonable attorney fees and costs.”
This is illustrative language only. Your actual lease language controls your rights.
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60-70%
An estimated 60-70% of CAM disputes are resolved through direct negotiation without formal proceedings when supported by detailed audit documentation [industry estimate]
Source: Commercial Lease Dispute Resolution Data (2024)
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Go to lextract.ioThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
