Overview Of Common Area Maintenance Charges
We will provide a detailed explanation of all fees and expenses and the options available to tenants to negotiate the various changes in their favor.
What are Common Area Maintenance Charges?
Common Area Maintenance (CAM), which is part of a triple net lease, is part of your monthly operating expenses.
The landlord pays CAM to the tenant to recover the cost of operating and maintaining communal areas in the building or campus.
This would include, for example, janitorial services in lobbies, bathrooms, landscaping, and parking lot maintenance. However, it would not usually have tenant-specific costs like additional HVAC for a server area.
How is CAM Expense Calculated?
The property manager will calculate the anticipated CAM expense for the building at the beginning of each year. This will be charged to each tenant monthly as part of their operating costs.
You are responsible for paying a portion of the Common Area Maintenance Expense. This is determined by how much square footage you have in relation to the entire property.
This estimation will be reconciled at the end of each year. The tenant will either be charged for any overages or credit any excess.
What's included in CAM Expenses
Your CAM fees may vary from one building to another and from landlord to landlord. Therefore, it is important that you carefully read your lease to understand what your CAM covers. Due to the different nature of the buildings and tenants, industrial and retail tenants will see very different CAM items.
However, for office tenants, it is common to include the following items in your CAM.
Lighting
Water for irrigation, drinking, and toilets
Landscaping
Maintenance of parking lots
Administrative fees
Sidewalks
Driveways
Stormwater management
Electric
Janitorial services
Management fees and salaries
Sewage
Window washing
Stairwell maintenance
Can CAM expenses be negotiated?
Because CAM expenses are simply reimbursements of landlord costs throughout the year, they cannot usually be negotiated.
Your tenant representative broker might be able to negotiate a cap in your lease terms to limit the amount your CAM expenses may increase.
