How do CAM reconciliations affect tenant operating expenses and landlord NOI accuracy?

• A. They adjust CAM billed vs actual costs, with tenant payment or credit, improving NOI accuracy
• B. They determine CAM charges for the next year
• C. They replace CAM charges with fixed fees
• D. They always increase CAM charges

Answer: (C)

CAM reconciliations compare the actual common-area operating costs to what tenants were billed. When actual costs come in higher than billed, tenants pay the difference; when they’re lower, the landlord issues a credit or carries a reduction to future bills. This alignment ensures tenant operating expenses reflect real costs and prevents the landlord from over- or under-recovering those expenses. Because CAM is part of operating expenses, keeping it accurately reconciled helps maintain an accurate landlord NOI—no artificial inflation or deflation from mischarged CAM charges. Reconciliations also inform future budgeting, but they don’t lock CAM into fixed charges or guarantees of increases.