Understanding Commercial Real Estate Management - Common Maintenance Area And Associated Charges

What is Common Maintenance Area?

The common area in a commercial property premise refers to the set of all those physical spaces which are accessible to all the tenants of the property, the landlord and also the

invitees of the landlord and any of the tenants. It generally includes the lobbies, corridors, staircase, parking lots, washrooms, elevators etc.

Who pays for it?

Every tenant within the premise of the commercial property owns the common maintenance area equally. Commercial real estate management usually builds an inclusive

management structure which charges each tenant for the maintenance and development of the common area.

How do you pay for it?

Here are five things you need to know in order to understand the process of CAM payment

Common maintenance area charges form a part of the total charges levied upon a tenant in accordance with the Triple Net Lease. A commercial property for lease is bounded by a payment structure in which the tenant pays the proportionate share of all common charges along with the basic rent.

The CAM charges are determined during the signing of the lease documents between the landlord and the tenants. The landlord tries to include most of the operational costs into the CAM charges, whereas the tenants try to turn the direction of negotiation otherwise.

How do you pay for it?

Here are five things you need to know in order to understand the process of CAM payment

The uncontrollable charges include the security expenses and the costs of basic utilities. The remaining charges, like lighting, landscaping etc., termed as controllable are subject to the negotiation during the preparation of the lease document.

In case of a commercial property with multiple tenants, the property owner tries to standardize the charges among all the tenants. The CAM is divided among the tenants in proportion to the tenant’s rented area to the total rent-able area in the property.

Commercial real estate services and the CAMCommercial real estate services manage the common maintenance area as well its charges on behalf of a property owner. They also oversee the auditing and reporting of the common maintenance charges, and avoid any confusion which might arise between the landlord and

the tenant over CAM charges.

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