What costs can be included in CAM charges?

Whatever the leases allow. Typically that means housekeeping, security, common-area electricity, lift and HVAC maintenance, DG running costs and insurance of common areas. Capital improvements, the landlord’s own legal and leasing costs and anything the leases exclude are normally non-recoverable. The lease, not the building manager, decides what goes into the recoverable pool.

Is GST charged on CAM charges in India?

CAM charges billed by a landlord or maintenance agency to commercial tenants are generally treated as a taxable supply and attract GST, commonly at 18%. Whether GST applies, and at what rate, depends on who is billing and on their registration, so it should be confirmed with a tax adviser. KeyMatrix raises CAM on GST invoices and tracks GST per invoice.

Who pays the CAM for vacant space in a building?

That depends on the lease. In most commercial leases the landlord carries the share of common-area costs that falls on unlet space, so occupied tenants pay only for their own chargeable area. A reconciliation should show the vacant share as a separate line, so tenants can see it has not been spread across occupied floors.

How often should CAM be reconciled?

Most commercial leases provide for a provisional monthly CAM rate with a reconciliation once a year, after the financial year’s costs are known. Tracking the amount recovered against the pool during the year is still worthwhile, because it shows early whether costs are running ahead of the provisional rate and a larger true-up is coming.

Can a tenant ask to see the CAM workings?

Many commercial leases give tenants a right to inspect or receive the CAM calculation, and tenants routinely ask for it before paying a true-up. A good reconciliation shows the recoverable pool line by line, the actual rate per square foot, the tenant’s chargeable area and loading, what was billed and the difference. KeyMatrix keeps those figures together so they can be shared.

BILLING · 30

CAM reconciliation for commercial properties

Build the recoverable cost pool, bill each tenant a CAM rate on their chargeable area with loading and escalation applied, and close the year with a reconciliation every tenant can follow — including what the landlord carries for vacant space.

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CAM · RECOVERABLE POOL · INVOICE

IN SHORT

CAM reconciliation compares what tenants were billed for common-area maintenance during the year with what those costs actually came to. KeyMatrix builds the recoverable cost pool, applies the CAM rate, common-area loading and escalation to each tenant’s area, and tracks the amount recovered, so the year-end true-up is a calculation rather than an argument.

Why CAM is the most disputed line on a commercial invoice

Rent is a number in the lease. CAM is a promise to share costs that have not been incurred yet. A tenant is billed a provisional rate every month, the building spends whatever housekeeping, security, power and lift maintenance actually cost, and at some point someone has to reconcile the two and send a tenant a bill — or a credit — for the difference.

That is where it goes wrong. The pool contains costs a tenant believes the landlord should carry. The chargeable area includes a loading nobody can explain. Vacant floors are quietly spread across the occupied ones. And the reconciliation arrives as a single figure with no workings, eight months after the year closed.

Tenants rarely object to paying for common areas. They object to not being able to check the arithmetic. The point of keeping CAM in the billing system is that the workings exist before anyone asks for them.

The stakes are not small. In a mid-sized office building the recoverable pool can easily run past a crore a year, and a provisional rate set fifty paise too low leaves several lakh to be recovered in one uncomfortable invoice. Set too high, it becomes a credit owed to every tenant, which is just as hard to explain to a landlord.

The terms a reconciliation turns on

Recoverable pool: The common-area costs the leases allow the landlord to pass on: typically housekeeping, security, common-area electricity, lift and HVAC maintenance, DG running and insurance of common areas.
Non-recoverable costs: What the landlord carries: capital improvements, the landlord’s own legal and leasing costs, and anything the leases exclude.
CAM rate: Cost per square foot per month. A provisional rate is billed through the year; the actual rate is known only when the year’s costs are in.
Chargeable area: The area CAM is charged on — usually super built-up rather than carpet area in commercial leases.
Common-area loading: The share of lobbies, corridors, lift wells and services added to a tenant’s carpet area. A 30% loading turns 7,000 sq ft of carpet into 9,100 sq ft chargeable.
Escalation: The agreed increase applied to the CAM rate, often yearly. It is set per lease, so tenants on different terms are billed correctly.
True-up: The year-end adjustment: the tenant’s share of actual costs minus what they were billed.

A worked reconciliation for one financial year

Billed, true-up and vacant share add back to the pool exactly: ₹1,29,60,000 + ₹3,78,000 + ₹14,82,000 = ₹1,48,20,000.

An illustrative CAM reconciliation for a 1,00,000 sq ft office building that is 90% let, billed at a provisional ₹12.00 per sq ft per month.
Line	Amount	How it is worked out
Housekeeping	₹38,40,000	Contract, twelve months
Security	₹31,20,000	Guarding contract, twelve months
Common-area electricity	₹42,00,000	Common meters only, tenant meters excluded
Lift and HVAC maintenance	₹18,60,000	AMCs plus call-outs
DG fuel and running	₹12,00,000	From DG run-hour logs
Common-area insurance	₹6,00,000	Annual premium
Recoverable pool	₹1,48,20,000	Sum of the lines above
Actual CAM rate	₹12.35 / sq ft / month	₹1,48,20,000 ÷ 1,00,000 sq ft ÷ 12
Billed to tenants	₹1,29,60,000	90,000 sq ft occupied × ₹12.00 provisional × 12
Tenant true-up due	₹3,78,000	90,000 sq ft × ₹0.35 × 12
Landlord’s vacant share	₹14,82,000	10,000 sq ft vacant × ₹12.35 × 12

Illustrative figures. Whether vacant space is carried by the landlord or spread across tenants is a lease term, not a software setting to guess at.

This is the page a tenant’s finance team asks for. Every figure on it comes from the pool, the rate and the lease.

The year-end CAM true-up for a single tenant occupying 7,000 sq ft carpet area.
Step	Figure
Carpet area	7,000 sq ft
Loading at 30%	+ 2,100 sq ft
Chargeable area	9,100 sq ft
Billed in the year at ₹12.00	₹13,10,400
Share of actual cost at ₹12.35	₹13,48,620
True-up before GST	₹38,220
GST at 18%	₹6,880
True-up invoice	₹45,100

GST on CAM charges is generally levied at 18%; the rate applied should be confirmed with your tax adviser.

The year-end close, in order

Done this way, the reconciliation goes out with its workings attached, weeks after the year closes rather than months.

Close the pool

Confirm every recoverable cost for the year and set aside anything the leases exclude.

Fix the actual rate

Divide the pool by the total chargeable area and by twelve to get the actual cost per sq ft per month.

Apply each lease

Work each tenant’s share from their chargeable area, loading and any escalation in their terms.

Compare with billed

Set the share against what the tenant was billed at the provisional rate. The difference is the true-up — a charge or a credit.

Separate the vacant share

What falls on unlet space is shown on its own line, so it is never silently spread across occupied floors.

Raise and reset

Issue true-up invoices with GST, and set next year’s provisional rate from this year’s actual plus the agreed escalation.

Billing CAM alongside rent and GST

CAM is billed on the same GST-compliant invoices as rent, with GST tracked per invoice. Once an invoice is paid it locks, so a reconciliation can never be produced by quietly editing what a tenant was charged in June. Corrections are recorded separately, the way an auditor expects, with the original left as it was.

The amount recovered is tracked against the pool through the year, which means the gap is visible in the third quarter rather than discovered at the close. If housekeeping costs have run ahead of the provisional rate, the building’s manager knows while there is still time to tell tenants a larger true-up is coming.

The costs themselves come from the books the facility team already keeps. Expenses are posted to the ledger and tagged to the vendor who was paid, and each AMC sits in vendor management with its payment schedule, so the pool is assembled from recorded spend rather than from a separate spreadsheet built at year end.

Questions about CAM reconciliation

: Whatever the leases allow. Typically that means housekeeping, security, common-area electricity, lift and HVAC maintenance, DG running costs and insurance of common areas. Capital improvements, the landlord’s own legal and leasing costs and anything the leases exclude are normally non-recoverable. The lease, not the building manager, decides what goes into the recoverable pool.
: CAM charges billed by a landlord or maintenance agency to commercial tenants are generally treated as a taxable supply and attract GST, commonly at 18%. Whether GST applies, and at what rate, depends on who is billing and on their registration, so it should be confirmed with a tax adviser. KeyMatrix raises CAM on GST invoices and tracks GST per invoice.
: That depends on the lease. In most commercial leases the landlord carries the share of common-area costs that falls on unlet space, so occupied tenants pay only for their own chargeable area. A reconciliation should show the vacant share as a separate line, so tenants can see it has not been spread across occupied floors.
: Most commercial leases provide for a provisional monthly CAM rate with a reconciliation once a year, after the financial year’s costs are known. Tracking the amount recovered against the pool during the year is still worthwhile, because it shows early whether costs are running ahead of the provisional rate and a larger true-up is coming.
: Many commercial leases give tenants a right to inspect or receive the CAM calculation, and tenants routinely ask for it before paying a true-up. A good reconciliation shows the recoverable pool line by line, the actual rate per square foot, the tenant’s chargeable area and loading, what was billed and the difference. KeyMatrix keeps those figures together so they can be shared.