Common Area Maintenance (CAM) Charges Explained
What Is Common Area Maintenance?
Common area maintenance (CAM) refers to the costs of maintaining shared spaces in a commercial property — lobbies, hallways, parking lots, elevators, restrooms, landscaping, and other areas used by all tenants. In many commercial leases, especially triple net (NNN) leases, tenants pay their proportional share of these expenses in addition to base rent.
CAM charges are one of the most common sources of landlord-tenant disputes because they can be opaque, variable, and surprisingly expensive.
What CAM Typically Covers
- Parking lot maintenance, striping, and lighting
- Landscaping and snow removal
- Common area janitorial and cleaning services
- Building security
- Shared utility costs (lobby HVAC, exterior lighting)
- Property management fees
- Common area repairs and maintenance
How CAM Is Calculated
Tenants typically pay based on their pro rata share — the ratio of their leased space to the total leasable area. If you lease 2,000 square feet in a 20,000 square-foot building, your pro rata share is 10% of total CAM expenses.
Some landlords charge estimated CAM monthly based on projected annual costs, then reconcile with actual expenses at year-end. This can result in surprise bills or credits.
Red Flags and Negotiation Points
- Capital expenditures: Ensure major items like roof replacement and HVAC systems are excluded or amortized over their useful life rather than charged in a single year
- Administrative fees: Some landlords add 10-15% management fees on top of actual CAM costs
- CAM caps: Negotiate an annual cap on CAM increases (e.g., 5% per year) to limit exposure
- Audit rights: Insist on the right to audit the landlord's CAM calculations and supporting documentation
- Gross-up provisions: In partially occupied buildings, the landlord may "gross up" expenses to what they would be at full occupancy, which affects your share
When to Consult a Lawyer
CAM charges can add thousands of dollars annually to your lease costs. Consider having a commercial real estate attorney review CAM provisions before signing and, if necessary, audit existing charges.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.