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Understanding CAM fees in your commercial lease

On Behalf of | Mar 30, 2020 | Real Estate |

You may have heard your landlord refer to CAM fees or seen them in your lease before. These charges can feel ill-defined and it can be hard to figure out exactly what they refer to. As a tenant, though, it’s important to know where your money is going so that you can properly protect yourself and your business.

What does CAM mean?

CAM stands for common area maintenance. These expenses are one of three operating expense categories: common area maintenance, insurance and property taxes. Depending on the type of lease you have, tenants will be contributing to different expenses. CAM fees typically apply to a lease called a Triple Net.

CAM fees are paid by tenants to the landlord to help cover the expenses for areas that are used by all tenants. These areas can include hallways, lobbies, parking lots, elevators, stairways, public bathrooms and security.

How do I know what I’m paying for?

Your lease should have a specification of what is included in the CAM fees. However, you should always ask your landlord or property manager if there is still ambiguity in the wording.

The exact expenses of your CAM fees will vary depending on your building and industry. They can include things as minor as new lightbulbs for common areas to large projects like construction on the entire parking lot. A good property manager will be paying close attention to the necessary CAM expenses and adjust them throughout the year.

It’s always smart to have a legal professional look over your lease and pay special attention to the CAM fees. You may want to ensure that you have an express audit right in your lease so that, should the need arise, you have the right to look over your property manager’s books and find out exactly what you are paying for.