Multi-Unit Flood Casualty Loss & Insurance Subrogation
SOP-RISK-001 • Casualty Incident Protocol & Insurance Subrogation Standard
🌊 $110,000 Subrogation RecoveryOPERATIONS
Case #2
Harbor Point Plaza CAM Audit Challenge
SCENARIO-CAM-001@v1 • SOP-ACCT-002
Turn
1
2
3
Exposure
$18,450
Tenant Risk
Elevated
Compliance
Active
Checkpoint
Turn 1 Live
STANDARD COMMERCIAL TRIPLE NET LEASE
Harbor Point Plaza • Suite 400 (Sarah Lin, CFO)
Document Ref: LEASE-HPP-2022-04
Execution Date: Oct 15, 2022
SECTION 14. COMMON AREA MAINTENANCE (CAM) EXPENSES
14.1 Definition of Operating Expenses. Tenant shall pay to Landlord as Additional Rent Tenant's Proportionate Share (18.4%) of the actual Operating Expenses incurred by Landlord in the operation, maintenance, and repair of the Common Areas.
14.2 Inclusions and Exclusions. Operating Expenses shall include all reasonable costs of maintenance, management, security, landscaping, and routine roof maintenance, membrane sealing, gutter clearing, and preventative patch repairs.
14.2(b) Capital Expenditure Exclusions. Operating Expenses shall expressly exclude: (i) Structural foundation replacements; (ii) Complete structural roof deck replacements (except that preventative membrane restorations extending the existing asset life without replacing structural decking may be amortized over the manufacturer warranty period or expensed if under the $50,000 major capital threshold); (iii) Leasing commissions or tenant improvements.
Note: Tap or click highlighted clauses to reference statutory lease authority in your decision.
GL Range: Jan 1 - Dec 31, 2025
Reconciliation Variance: $18,450
The tenant audit disputes Entry #4812 below. Review the invoice description and accounting classification:
Date
Vendor
Description
GL Code
Amount
03/12/2025
Coastal Gutter Co.
Quarterly drain clearing
6240-01
$1,850.00
08/18/2025
Apex Commercial Roofing
Elastomeric membrane seam patch & UV coating (Bldg C)
6240-08
$32,000.00
11/04/2025
Pacific HVAC
Curb flashing reseal
6240-02
$2,400.00
Attached Invoice Apex #R-8841:
"Scope: Power wash TPO roof membrane. Clean and prime 140 linear feet of split seams over Bldg C retail units. Apply 2 coats of elastomeric liquid seal. Scope did not replace insulation or structural decking. Work constituted preventative maintenance to prevent water intrusion."
HARBOR POINT RETAILERS — CFO AUDIT DEMAND
From: Sarah Lin, CFO • Legal Notice of CAM Discrepancy
Notice Ref: HPR-CAM-2025-09
Received: 3 Business Days Ago
Attention: Fiduciary Property Asset Manager
"We have completed our third-party CPA review of the 2025 Common Area Maintenance year-end true-up statement. We identified a $32,000 capital expenditure for roof resurfacing (Invoice Apex Commercial Roofing #R-8841).
Under Section 14.2(b), capital expenditures are strictly excluded from Operating Expenses. As our proportionate share is 18.4%, our pass-through is burdened by $5,888 on this single invoice. Furthermore, we dispute an additional $12,562 across HVAC repairs.
Formal Notice: Harbor Point Retailers is withholding our April CAM payment of $18,450 until ownership credit adjustments are issued and general ledger backup is furnished."
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