Common Area Maintenance (CAM) charges can cause unwanted surprises in a commercial lease. CAM charges include items that the Landlord must pay to maintain the property. These costs include real estate taxes, Landlord’s insurance, utilities, property maintenance, property, and parking lot repair, etc. The Landlord places the burden on its tenants to reimburse the Landlord for these expenses. The Landlord does this by including CAM charges in the lease. A tenant must pay its pro-rata share or percentage of occupation of a multi-unit property.

One issue that arises is that CAM language can be complex and not clear without in-depth review. There may be language that involves increasing the CAM by a certain percentage each year. This increase may not equate to what the Landlord is actually paying to maintain the property. We recommend retaining the services of a business attorney. We can review, explain, and negotiate CAM language on your behalf. Another issue is that CAM provisions include language that requires the tenant to pay for some of the landlord’s real estate taxes. You should negotiate a cap for CAM charges, especially during volatile economic times. This way the CAM charges cannot increase over a certain percentage each year.