CAM fees - What are they for???

I am negotiating a small office space for a national tenant and the local rep asks me, "What are CAM fees?". Sounds easy to answer, and in fact, it used to be, but in today's real estate market this somewhat straight forward term has become a catch all phrase.

CAM used to be very standard and meant to cover  Common Area Maintenance, but what it has now become is a term that encompasses any cost the owner would like to pass along to the Tenant. What this does is create a very open interpretation of what items should be included in this fee. Leases should incorporate an entire section explaining what costs will be allocated as "CAM", what items will be excluded from CAM, and how the included costs will be managed. In other words, perhaps the janitorial is included in CAM and the owner is responsible for the janitorial service, then that cost needs to also be maintained as in line with the area costs of similar services. This protects the Tenant from the landlord hiring someone at $10 and hour to clean the premises and billing the tenant as $100 per hour. 

Just be very cognizant of this section, which is usually labeled "Operating Expense" , and make sure to question any portion that you may not agree with. Remember, once you sign, the deal is set in stone!

 

By: jackstrollo | In: Tenant | Comments: 0 | On: 03/30/2012 14:52:23

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