Guide

CAM reconciliation: check this year’s estimate billing first

A CAM reconciliation, or true-up, settles a year of estimated charges against what the costs actually were. Before you run it, check something simpler: were the monthly CAM / NNN estimates billed at what each lease sets?

What is a CAM reconciliation?

CAM stands for common area maintenance: charges that include expenses for the shared parts of a property, such as the lobby, elevators, courtyards and parking lots. The leases of retail, office and industrial tenants define them, and the landlord charges a portion back to tenants on top of base rent.

Under a triple-net (NNN) lease, the tenant pays three kinds of property costs on top of base rent: real estate taxes, building insurance, and CAM or other operating expenses.

Because those costs change from year to year, they aren’t billed at actual cost each month. The landlord budgets the year, works out each tenant’s estimated share and bills it in equal monthly installments alongside base rent.

The CAM reconciliation, also called the CAM true-up or, across all three nets, the NNN reconciliation, is the year-end settlement. The landlord compares the estimated charges with the actual expenses. If actual costs came in higher, the tenant owes a true-up payment; if the estimates were higher, the landlord issues a credit or refund.

The year-end calculation follows each lease: the tenant’s share of the costs, which expenses are recoverable, and any base year, caps or gross-up terms the lease sets.

When true-up season happens

The reconciliation happens at year-end or within the period the lease sets, typically 90 to 180 days after the calendar year closes. Each lease can set its own timing; for a lease on the calendar year, that usually puts the true-up within the first three to six months of the new year.

That makes the weeks before year-end a good time to look at the monthly estimate billing itself.

The step before the true-up: were the estimates billed right?

A true-up starts from the estimates. The estimate a tenant is billed each month is keyed into the billing system by hand, and the lease, or an amendment to it, can say something different. Every amendment, renewal and recovery change has to be re-keyed, and over time the lease and the billing drift apart.

When the estimate billed is below what the lease sets, the difference goes unbilled every month. Nobody owns the consistency between the documents and the ledger, so the gap recurs until an audit or a sale surfaces it.

Checking the estimate billing first means you go into the true-up knowing which tenants were billed below what their lease sets, for which months and by how much, with the clause for each.

Where CAM estimate billing drifts

Ways a monthly recovery charge can end up below the lease:

An amendment changes the estimate, and the billing keeps the old figure.
A renewal or a suite change moves the tenant to new terms that never reach the billing.
A lease with several suites, where the recovery charge for one suite is billed below what the lease sets.
An acquired lease whose recovery charges were set up for billing by someone else.

It’s rarely anyone’s fault. Each of these is a change made in one place and not in the other.

A worked example

A retail tenant’s first amendment raises its estimated CAM to $1,850.00 a month from January 1, 2026. The billing system keeps charging the old $1,600.00.

Issue: Recovery charge billed below the lease: CAM, Suite 140
Clause: First Amendment §3: “…commencing January 1, 2026, Tenant shall pay estimated Common Area Maintenance charges of $1,850.00 per month…”
Expected: $1,850.00 per month
Billed: $1,600.00 per month
Difference: $250.00 per month, January to October 2026 (10 months): $2,500.00

Illustrative example, not customer data.

Your team can check it in a minute: open the amendment at §3, look at the billed charge, redo the subtraction. Going into the true-up, you know the estimate billing for Suite 140 was $2,500.00 below what the amendment sets, and you decide how to correct it.

What Leasecord checks before your NNN reconciliation

Leasecord compares each executed lease and its amendments with what your billing system actually billed, period by period and suite by suite. For recoveries, it finds the charges the lease sets (CAM / NNN / opex estimates) that were billed below the lease amount. In the same pass it checks base rent and scheduled rent steps, so the gaps it finds for a lease show up in one report.

Each finding shows the period, what the lease says, what was billed, the difference in the lease’s own currency, and the clause.
Reviewed by people. A person checks every lease fact behind a finding before it reaches you.
Nothing guessed. If your export has no recovery charges for a lease, that’s reported as a gap, not filled in with a number.
Read-only. Leasecord never connects to or writes to your accounting system, and you decide what to re-bill. Whether you can back-bill depends on your lease terms and jurisdiction.

The same comparison runs for base rent and rent steps across the portfolio: see rent roll reconciliation against your leases. If an acquisition, a portfolio takeover or an audit request is behind the question, a commercial lease audit checks every lease and amendment the same way.

What to pull before you start

Your executed leases with every amendment and side letter.
A charge-history export (CSV or Excel) with every billed charge, recovery charges included: charge code, amount, period and tenant / unit. A current rent-roll snapshot shows only today’s charges, so it can’t show a month that was billed short last spring.
Your charge-code list: which codes are base rent, CAM, tax and the rest.

We set up your billing mapping with you. A charge code that isn’t mapped is raised with you, never guessed.