What is CAM?

In Property Management by Tim DieselLeave a Comment

What is CAM? If you’re just hearing the term for the first time or have encountered it before but are unclear, you’re in the right place. We’ll keep this simple and not get too deep into the lingo. CAM or common area maintenance fees, also known as CAM fees, or even called “load fees,” are just what the name describes. Common area maintenance fees are charges levied on commercial tenants to help pay for certain property upkeep costs.

What is CAM?

Okay, so just about every type of commercial lease contains CAM fees. These come in two different forms: variable and flat or fixed. The former, variable, are based on a number of factors. While the latter, flat, are merely a fixed amount.

Common-area maintenance charges refers to the fees paid by tenants. Such fees are usually paid on a pro rata basis, to compensate the landlord for the costs of operating, repairing, and maintaining common areas. Such costs include costs that are incurred for cleaning, lighting, and repairs. Common-area maintenance charges are also termed as common-area operating expenses. —US Legal.com

Although, it doesn’t necessarily follow that flat are always better than fixed or the other way around. Why? Well, it’s due to the fact that commercial leases vary greatly in their arrangements between lessor and lessee (or the owner/landlord and the renter/tenant). In other words, there is often a whole lot of difference between one commercial lease and another, though there are generalities or commonalities.

General or Typical CAM Lease Charges

Obviously, all the charges are spelled out in the lease. CAM fees cover a variety of expenses property owners/landlord incur to keep the premises in good condition. As such, CAM fees, or common area maintenance fees usually cover the following: common area lighting, land irrigation, landscaping upkeep, and parking lot maintenance. However, these can also include other expenses, such as sidewalks, driveway, storm water, and even administrative fees.

How are CAM Fees Calculated?

Typically, CAM fees or load fees, are calculated on a pro-rata basis, tied directly to the amount of leased square footage. Meaning, the more square footage leased, the more costly the CAM fees.

For example, a tenant leasing a could pay anywhere from 10 percent to 40 percent or even more of the property owner’s monthly expenses. In these instances, if the monthly property expenses come to $4,000, that means the tenant’s CAM fees range from $400 or 10 percent to $1,600 or 40 percent.

Now, this is obviously quite significant and can add-up to a substantial amount. But, it’s good to know CAM fees, like many other parts of a lease, are negotiable. It’s really a matter of individual situations and as mentioned, commercial leases vary considerably from one to another.

If you’d like to learn more about commercial real estate, please contact us.



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