What are Common Area Maintenance (CAM) Charges?
Common Area Maintenance (CAM) charges are the costs incurred to maintain and operate the shared spaces within a commercial property. These areas can include hallways, restrooms, parking lots, and other communal facilities. CAM charges ensure that the common areas are kept in pristine condition, creating a pleasant environment for tenants and visitors.
The Importance of CAM Charges
CAM charges are significant in maintaining the operational quality and appearance of shared spaces. Without these charges, common areas would likely deteriorate, impacting the overall value of the property and the satisfaction of its tenants.
How CAM Charges Are Calculated
CAM charges are usually calculated based on the tenant’s proportionate share of the common areas. For example, if a tenant occupies 10% of the total leasable square footage of the property, they would be responsible for 10% of the total CAM costs. These costs can include utilities, cleaning services, security, landscaping, and more.
Inspirational Example
In a bustling regional mall, the expense required to heat, cool, light, and clean the common spaces is allocated fairly among the tenants. Suppose the total utility cost for cooling and lighting the common areas is $50,000 annually. If a boutique store occupies 5% of the total leasable space in the mall, they would pay 5% of the $50,000, which amounts to $2,500 annually. This ensures that all tenants contribute to the maintenance and operation of shared spaces, helping maintain the mall’s welcoming atmosphere.
FAQs About CAM Charges
Q: What is typically included in CAM charges?
A: CAM charges often cover utilities, cleaning, security, maintenance services, landscaping, snow removal, and shared amenity upkeep.
Q: Can CAM charges increase over time?
A: Yes, CAM charges can vary year to year based on fluctuating utility costs, maintenance needs, or improvements made to common areas.
Q: How can tenants verify the CAM costs charged to them?
A: Tenants can request a detailed breakdown of CAM charges from their landlord or property manager.
Q: Are CAM charges negotiable?
A: While not always negotiable, tenants can sometimes negotiate caps on CAM expenses or ask for a more detailed audit of the charges.
Related Terms: Triple Net Lease, Gross Lease, Operational Expenses, Variable Costs, Fixed Costs.
