If you’re looking to sign a lease for your business, you’ve probably heard the term Common Area Maintenance or CAM. Before you sign a lease, it’s important to understand CAM terms and fees.
When you’re choosing a property for your business, don’t sign a lease before you fully understand it. Settling for a lease that you’re not sure about could end up being detrimental to your business and cost you more than it needs to. Working with a professional to go over your lease can help set your business up for success and keep you from being taken advantage of.
What is CAM?
Common Area Maintenance fees are also referred to as Load Factor in non-industrial spaces or Administrative Fees. Basically, Cam fees are expenses paid by the tenant based on the square footage you rent. These can be a fixed amount, paid monthly, quarterly or annually or they can vary each pay period. These CAM fees are typically meant for the tenant to contribute to the direct costs of space maintenance. Still, your landlord may include costs that are indirectly related to the building.
CAM fees are meant to cover expenses for common area maintenance, like hallways, elevators, public bathrooms and parking lots. In your lease, there should be a list of exactly what your fees will cover. There will also be note of how often charges occur and how much your landlord is able to raise them each period.
Negotiating CAM terms
A good rule of thumb once you understand what the CAM terms on your lease say is to always ask for a better deal. CAM fees can be very complicated, so don’t go into a negotiation or dispute about them without fully understanding what your lease says and preparing yourself.
As you get ready to negotiate your lease, here are some tips to talking about CAM fees:
- Get specifics on where the fees are going. Ask if you are paying for legal costs, security, advertising or expenses for the landlord’s business, repair for the building and utilities or rent for the leasing office.
- Ask for permission to review your landlord’s bills and where your CAM payments are going. It’s always smart to know where your payments are going.
- Talk about how much the fees can increase each year and negotiate a cap.
Attorneys who specialize in property law can help you walk through your lease and negotiate terms that will support a successful future for your business.