CAM reconciliation letter: what to include, with a template

The CAM reconciliation letter is the part of the exercise the tenant actually sees. After weeks of ledger work, it is a page or two that says: here is what the common areas cost, here is your share, here is what you paid, and here is the difference. A good letter gets paid. A vague one gets a phone call, a request for backup, and sometimes a dispute.

This guide covers what the letter should contain, how to handle credits and disputes, and gives a template you can adapt. Your lease controls the deadline, the format and what you must provide, so check it first.

Before you write: check the lease

Three questions the lease may answer, and the answers vary:

• Timing. Some leases require the statement within a set number of days after year-end. Missing it can limit what you can bill. Check each lease, because they are not always the same at one property.
• Required content. Some specify what the statement must show or that a certified copy of the tax bill accompany it.
• Audit rights. Many leases let the tenant inspect your records, for a limited period after receiving the statement.

State law can also matter. This guide is general information and not legal advice; if a deadline or a dispute is on the line, ask your attorney.

What the letter should contain

1. Identifying details

Property name, tenant legal name, suite, the period covered and the date of the letter. Use the tenant name on the lease.

2. The tenant's share, and how it was found

State the percentage and the method: square feet over gross leasable area, a stated denominator, or a fixed percentage from the lease. If the tenant was there for part of the year, say so and show the fraction.

3. Each pool, with the property total and the tenant's portion

Common area maintenance, real estate taxes and insurance, at least. If the lease splits CAM into controllable and non-controllable, show both, because a cap may apply to one of them.

4. Anything that changed the number

If a cap, an exclusion, a base year, a gross-up or an administrative fee applied, say it in one plain sentence each, with the amount. This is the part that most reduces calls: a tenant who sees "your controllable CAM was limited by the lease's 5% cap, a reduction of $120" is much less likely to ask why the increase was not larger.

5. Estimates billed

The total you billed in monthly estimates for the period. Use what was billed, not the rent roll's monthly figure, if they differ.

6. The result, labeled clearly

Balance due or credit, in the same place every year. State the amount, the due date or how a credit will be applied, according to the lease.

7. A contact line and an offer of backup

A name, phone and email for questions, and a statement that supporting detail is enclosed or available.

A template

[Landlord name]
[Date]

[Tenant legal name]
[Suite, Property name and address]

Re: Reconciliation of common area maintenance, real estate taxes and insurance for [period start] to [period end]

Dear [Name],

This letter reconciles the estimated charges you paid during [period] against the actual costs of operating [Property name] for the same period, as provided in Section [number] of your lease.

Your share: [share]%, calculated as [method, for example "2,000 square feet of 40,000 square feet of gross leasable area"].

Controllable common area expenses: property total [amount], your share [amount]
Non-controllable common area expenses: property total [amount], your share [amount]
Real estate taxes: property total [amount], your share [amount]
Insurance: property total [amount], your share [amount]
Administrative fee ([percent]% of [base]): [amount]

[If applicable] Your lease limits increases in controllable common area expenses to [percent] a year; this reduced your charge by [amount].
[If applicable] Your lease excludes [item]; [amount] was removed from your share.

Total charges for the period: [amount]
Estimates billed: [amount]
Balance due [or Credit]: [amount]

[Payment instructions and due date, or how the credit will be applied.]

Supporting detail, including the expense totals by category, is enclosed. If you have questions, please contact [name] at [phone] or [email].

Sincerely,
[Name, title]

Credits, and what to do if the number is wrong

A credit is still a letter. When the true-up is negative, send the same statement. Tenants appreciate a credit and notice when one is missing.

If you find an error after sending, correct it promptly in writing, show the corrected statement beside the original and say what changed. Waiting does not make it smaller.

If a tenant questions a charge, answer with the backup: the expense total for the pool, the ledger lines behind it and the lease section you relied on. Letters that already show the share, the pools and the adjustments resolve most questions without escalating.

Attach backup, and keep it

Send the summary, and keep behind it the ledger detail grouped by pool and the calculation for each tenant. Your lease may say how long to keep it; many give tenants an audit window, and your own records should outlast it.

Where CAM Rec fits

Writing a few of these by hand is fine. Writing one for each tenant at several properties, with the right cap, exclusion and fee on each, is where mistakes and late nights come from. CAM Rec produces a letter PDF per tenant from the numbers you have approved, showing the share, each pool, the cap, gross-up and fee applied, the estimates billed and the true-up, along with a backup ZIP per property containing the letters, the calculation as CSV and the ledger detail by pool. Each tenant also gets a download link to their own letter that you can paste into your own email. CAM Rec does not email the tenants for you, and the amounts only reflect the terms you confirmed, so it is worth reading your lease alongside it.

The sample, on a fictional strip center, generates a real letter and backup you can download, with no sign-up.

Related: the CAM reconciliation steps that produce the numbers in the letter, the CAM reconciliation example worked for one tenant, and the office version in operating expense reconciliation.

This is general information, not legal or accounting advice.