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Do CAM charges have you confused?

| Jul 10, 2021 | Commercial Real Estate |

If you are preparing to sign a lease for a California commercial property, you would be smart to read it carefully and be on the alert for any surprise expenses. Your lease may include more than the amount of rent you will pay, and understanding those items may give you room to negotiate. 

One item you may see on your lease is a charge for common area maintenance, which the lease may list as CAM. Landlords commonly include CAM charges on their leases to defray the cost of common area maintenance. However, that cost may not always be fair to tenants.  

What should I expect to pay for? 

There is no consensus about what CAM charges should include or how much landlords should expect tenants to pay to keep up the common areas. Ideally, the property manager should balance the amount each tenant contributes to the common area expenses. If you are paying for common area maintenance, you might also expect this to improve the chances that any necessary repairs or upgrades would occur in a timely manner, which may not happen when a property owner has to foot the bill.  

If you see a CAM charge on your lease, you may want to ask your landlord exactly what that cost covers. Commonly, CAM charges might include any of the following items: 

  • Cleaning, stocking and repairing common bathrooms 
  • Regular maintenance and repairs for elevators 
  • Cleaning and lighting in hallways and stairwells 
  • Parking lot upkeep, including repaving and lighting 
  • Clearing and maintaining sidewalks and paths 
  • Mowing, weeding, planting flowers, trimming shrubs, irrigation and other landscaping 
  • Air conditioning, water, heat and other utilities in common areas 

You may see the reasonableness in contributing to these expenses. However, your landlord may also expect you to pay a share of property taxes, insurance, permits, management fees and building repairs. In fact, your lease may include any expense your landlord wants to minimize for himself or herself. Depending on the type of lease you sign, your landlord may be able to pass these charges on to you, but there is usually room to negotiate, especially if you feel the CAM charges in your lease are excessive or unfair.