What are CAM Charges (Common Area Maintenance)?
The Short Answer
CAM Charges (Common Area Maintenance) explained simply
CAM Charges stand for Common Area Maintenance charges. These are fees that tenants in commercial properties pay to cover the costs of maintaining shared spaces. Think of things like hallways, lobbies, parking lots, landscaping, and shared restrooms. Landlords pass these costs on to tenants, usually as an additional charge on top of their base rent. The specific items included in CAM charges can vary widely depending on the lease agreement.
Real-World Example
CAM Charges in a Retail Strip Mall
Imagine a retail strip mall with several stores. The landlord incurs costs for maintaining the parking lot, exterior lighting, landscaping, and shared walkways. These costs are grouped as CAM charges. Each tenant pays a portion of these charges, often based on the square footage they lease. For example, if a tenant leases 1,000 square feet in a 10,000 square foot strip mall, they might pay 10% of the total CAM charges.
Why this matters
Understanding CAM charges is crucial for tenants because they add to the total cost of leasing a commercial space. These charges can sometimes be negotiated, and it's important to review the lease agreement carefully to know exactly what's included. For landlords, CAM charges help recover the expenses of maintaining the property, ensuring shared areas are well-kept.
Always scrutinize the CAM clause in your lease. Understand what expenses are included and how they are calculated. This can significantly impact your overall occupancy costs.
Always scrutinize the CAM clause in your lease. Understand what expenses are included and how they are calculated. This can significantly impact your overall occupancy costs.
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