Reviewing CAM reconciliation for a tenant in a 240K sqft retail center. Landlord is passing through utility costs but when I pulled the master meter bills and divided by pro-rata share, the number is 18% lower than what the tenant was billed. Three years of overcharges. Landlord claims "administrative fee" accounts for the difference. Is 18% admin fee defensible?
CAM reconciliation — utility pass-throughs the landlord "forgot"
18% is way outside industry norm. Most CAM admin fees on utility pass-throughs run 3-8%. Check the lease carefully — the admin fee percentage should be explicitly spelled out. If the lease says 5% and they're charging 18%, that's a straight billing error, not an interpretation dispute.
And don't forget to look at whether the landlord is marking up the utility cost before applying admin fee. Some leases allow "actual cost plus admin" but landlords apply admin fee to their internally allocated cost which already has markup baked in. Double-dip.