Adding CAM charges is typically beneficial to the landlord because it allows them to be reimbursed for certain costs associated with owning and managing the property. This protects the property owner from increases in costs, so the property's return on investment isn't greatly affected.
For tenants, CAM charges can be scary. While the landlord gets protection from fluctuating costs, the tenant may end up taking a hit when expenses rise.
On the other hand, CAM fees can benefit the tenant. Some landlords will put off certain maintenance and repairs if they have to bear the cost themselves. Passing these costs on to tenants tends to make landlords less reluctant to keep up with maintenance, ensuring the tenant will have a clean, well-maintained space.
What's included in CAM?
CAM charges normally include all the costs of repairing, maintaining, and cleaning the common areas of a leased property. The exact costs included in CAM charges are completely dependent on the specific lease that a tenant and landlord agree on.
These charges can be limited to a few specific items or can be much broader, covering all the expenses on the property. However, some costs can generally be expected, including:
1. Parking lot maintenance
This may include repairing cracks, resurfacing, repainting lines, and parking lot lighting.
2. Lawn care and landscaping
Common lawn care and landscaping costs include mowing the grass, weed control, fertilizing, maintaining the irrigation system, trimming shrubs and trees, replacing mulch, and planting flowers.
3. Snow removal
This cost obviously fluctuates greatly by location. Snow removal costs can also vary significantly from year to year, depending on the amount of snow the area gets.
4. Sidewalks
It's in everyone's best interest to keep sidewalks maintained. Actions like replacing broken sections of concrete and keeping sidewalks clear of snow and ice are important to the safety of everyone visiting the property.
5. Hallways
If the property includes common hallways shared by multiple tenants, the property manager will usually be responsible for keeping them clean and well-lit.
6. Bathrooms
Many multiunit commercial properties have shared restrooms. These have to be cleaned regularly and stocked with supplies.
7. Elevators
If the building has elevators, there will be expenses related to maintaining them.
8. Utilities
The costs of electricity for lighting the parking lot, water for the bathrooms, and gas to keep the hallways heated are usually shared among the tenants benefiting from these utilities.
9. Other operating expenses
Different properties have their own unique needs, and the costs associated with them are often shared by the tenants. This could include on-site management, security, or any other expenses required to manage and maintain the commercial property.
There are a number of other operating costs that are common to see included in the CAM charges spelled out in a lease, some of which go beyond what many would consider "maintenance," including:
- Building repairs
- Property management fees
- Administrative expenses
- City permits
- Property taxes
- Property insurance
- Any other expenses a landlord may want to include
