Business owners and entrepreneurs looking for retail or office space may choose to rent facilities in a business complex that contains multiple units. Landlords who lease multi-unit commercial buildings frequently pass maintenance and repair costs on to their tenants.
Often, those costs come in the form of common area maintenance (CAM) charges. Also known as CAM fees, CAM charges represent the cost to maintain shared amenities, such as bathrooms, parking lots and the building’s infrastructure. They can make balancing a business budget more difficult.
CAM fees can make costs unpredictable
In some commercial leases, landlords establish a specific amount they intend to charge as CAM fees. Each tenant pays a fixed amount every month in addition to their rent and any utilities for which they are responsible.
Other times, landlords have variable CAM fees included in their commercial leases. They assign a percentage of responsibility to each tenant. The problem with that approach is that they may try to pass on sudden, massive expenses, such as resurfacing the entire parking lot, to the tenants.
The CAM charges could fluctuate drastically from one month to the next. Unpredictable CAM fees can put intense financial pressure on business tenants, who may be at risk of interest, late fees or even eviction if they cannot pay what their landlord charges them.
In scenarios where CAM charges surge and seem inappropriate given the services provided by the landlord, tenants may need help reviewing their leases and responding effectively to excessive CAM charges. Retaining the support of a commercial real estate attorney can help frustrated business tenants fight back against unfair charges or prospective commercial tenants evaluate police terms for hidden risks, such as variable CAM charges.