What is a CAM reconciliation and who is responsible for it when a commercial property sells mid-year?

Common area maintenance (CAM) reconciliation is the year-end process of comparing what tenants were charged throughout the year in estimated CAM costs against what the landlord actually spent, with a top-up bill or refund correcting the difference. Landlords typically budget and bill CAM monthly based on an estimate, then true it up once real invoices for landscaping, snow removal, cleaning, and repairs are in.

When a property sells partway through the year, responsibility for that reconciliation doesn't disappear. It usually falls to whoever owns the property at year-end and sends out the reconciliation statements, but the actual costs and collections need to be apportioned between the seller's and buyer's periods of ownership. This is normally addressed directly in the purchase agreement's adjustment and proration clauses, so each party bears the CAM costs and receives the CAM collections attributable to when they actually owned the building.

Buyers should ask for the seller's CAM budget, actual costs incurred to the sale date, and amounts already billed to tenants, so the statement of adjustments accurately splits the numbers. Leaving this vague is a common source of post-closing disputes between buyer and seller.