Additional Rent audit in Canada: how to check your commercial reconciliation

Almost every commercial lease in Canada bills Additional Rent — your share of the building’s Operating Costs, known regionally as TMI (Taxes, Maintenance, Insurance) or CAM (Common Area Maintenance). Once a year the landlord reconciles it. This guide covers how it works, the overcharges to watch for, what differs by province, and how to audit your own statement.

Additional Rent, Operating Costs, TMI, CAM — same thing?

Largely yes. Additional Rent is the umbrella lease term across Canada. Operating Costs is the accounting term; TMI is common retail shorthand; CAM is the US-origin term for the maintenance portion. Whatever it’s called, it’s your proportionate share of realty taxes, insurance, utilities, snow removal, landscaping, cleaning, security and repairs — governed by what your lease allows.

How the year-end reconciliation works

The landlord estimates the year’s Operating Costs, bills you monthly, then sends a reconciliation (usually within 90–120 days of their fiscal year end) comparing your estimates to your share of the actual costs. A shortfall is billed; an overpayment is credited. It’s the one time the real numbers appear — so it’s where errors show up.

The most common Additional Rent overcharges

1. Capital costs billed as operating costs — repaving, roof or structural work your lease excludes, dropped into the pool.
2. Management / admin fee on the wrong base — charged on more than the lease allows (often it should exclude taxes and insurance).
3. Gross-up on fixed costs — occupancy gross-up wrongly applied to taxes or insurance, which don’t vary with occupancy.
4. Wrong proportionate share — a percentage or denominator that doesn’t match the lease.
5. Sales-tax errors (GST/HST) — the tax charged on the wrong base or double-charged after estimates already carried it, throwing off your input-tax-credit.
6. Estimates never trued-up — monthly payments not credited against your actual share.

What differs by province

The audit logic is national, but three things change by province — which is why localization matters:

• Sales tax on Additional Rent. Commercial rent (including Additional Rent) carries GST/HST. Rates: Ontario 13% and Atlantic Canada (NS/NB/NL/PEI) 15% HST; BC, Alberta, Saskatchewan, Manitoba charge 5% GST (provincial PST generally doesn’t apply to commercial rent); Quebec is 5% GST + QST. Recovered property taxes and insurance become taxable when re-billed as Additional Rent.
• Limitation periods. The window to recover an overpayment is usually 2 years (Ontario, BC, Alberta, Saskatchewan), but Quebec is generally 3 years — check your province.
• Legal system. Nine provinces are common-law; Quebec is civil law (and French), so lease and audit-rights concepts differ there.

For the Ontario specifics — HST, audit rights, and the 2-year limitation — see the Ontario TMI & Additional Rent guide.

How to audit your Additional Rent

You don’t need an accountant or a contingency auditor (who typically only take large tenants). Upload your lease and reconciliation statement: the check reads both, compares every charge to your lease terms (sales tax included), and flags what doesn’t reconcile — each tied to the exact clause, with a calm request letter you can send your landlord. The free check is live for Ontario today; the principles above apply across Canada.

Additional Rent audit FAQ

It varies with the errors, but industry figures put typical recoveries at a few percent of occupancy cost — often thousands of dollars for a mid-size tenant. What matters is whether each charge is allowed and calculated correctly under your lease.

To formally examine the landlord’s invoices, most leases grant an audit/verification right within a set window. But you can always check your own statement against your own lease first — that’s what the free check does, and it tells you whether it’s worth requesting the backup.

Yes. Upload your lease and statement and see what it finds, tied to your clauses, at no cost.

CAM Proof is software that checks your lease and statement; it is not a law firm and nothing here is legal or tax advice. Rates and rules are general — your lease and provincial law govern.