Property management glossary

CAM reconciliation is the year-end process in which a commercial landlord compares the common area maintenance (CAM) charges tenants paid as monthly estimates with the actual costs for the year. Each tenant's share is usually its leased square feet divided by the property's total square feet. The landlord then bills the shortfall or credits the overpayment, following the terms of each lease.

Net operating income (NOI) is a property's income after operating expenses and before debt payments, capital improvements, depreciation, and income taxes. The formula is effective gross income minus operating expenses. For example, a 24-unit building with $397,440 of effective gross income and $153,346 of operating expenses has an NOI of $244,094 per year.

An owner statement is the monthly report a property manager sends each owner. It shows the starting balance, rent and other income collected, expenses paid, management fees, the reserve held back, and the amount distributed. It comes from the owner's ledger in the trust account, so its ending balance must match that ledger.

A rent roll is a report that lists every unit in a property with its resident, lease dates, market rent, lease rent, deposit, and current balance. Owners, lenders, and buyers use it to check occupancy and income. Its totals should tie to the general ledger: the scheduled rent, the past-due balances, and the deposits held.

A security deposit is money a resident pays at move-in that the landlord holds to cover unpaid rent or damage beyond normal wear and tear. State law sets the rules, and they vary. In California, the general limit is one month's rent and the landlord has 21 days after move-out to return the deposit with an itemized statement. In Texas, the refund deadline is 30 days after the resident surrenders the unit, as of October 2026.

Trust accounting is the set of records a property manager keeps for money that belongs to other people, such as owner rent and resident security deposits. The money sits in a separate trust bank account, and each owner and resident has a separate ledger. In California, for example, a broker must deposit trust funds within three business days and reconcile the trust account at least once a month. Rules vary by state.