Expert: Jim Avancena, CPM - 4/28/2008

Question
Are there standards for cam charges as to what they cover?
Taxes, common electric water and sewage, garbage do they have include certain things or is that up to the landlord?

Answer
Nanette;
Generally there are many types of CAM costs that are USUALLY included together and form a group of costs that commonly compose CAM expenses for a property.  The group of expenses do not constitute a industry wide accepted "standard" however.  

Regardless of what landlord's and tenant's might consider the usual group CAM costs; there are usually a few exceptions for each particular property that may or not be included in CAM costs.     Therefore, the only "standard" for CAM expenses that both you and your specific landlord are concerned with is the group of expenses that are specifically defined in your lease.  

Your lease must have a lease provision that describes IN DETAIL how your CAM charges are determined and calculated each year. Your lease CAM provision will normally stipulate exactly which costs will be included in the annual CAM calculations.  For instance, there should be a portion of the CAM language that says something like:  

    "The tenant shall pay its pro-rata share of the combined component Common Area Maintenance expenses each year.  The CAM costs shall include: electrical expense for lighting the parking lot lighting, the cost of any on-site janitorial or engineering staff working at the property, water and sewer charges applicable to the property, the cost of any snow removal services provided for the parking area, the cost of any maintenance or repairs needed for the common areas of the property including, but not limited to painting, landscaping fees, clean up of the parking area trash, and other similar and reasonable fees, security services,........".

Regardless of what may be allocated to the tenants as CAM fees at other properties, the specific language of your lease is what creates the "standard" for CAM charges for your property.

Taxes can be listed as one of the CAM charges for a property, however, it is just as common to find the cost of Taxes addressed in a separate similar provision of its own.   It is done both ways.  

Garbage removal can be included as one of the component CAM expenses if common dumpsters are provided by the landlord for the use of the tenants.  Many shopping centers require that every tenant contract for their own garbage removal services, and in such case, there would be no trash/garbage removal expense included in CAM fees - excluding of course the cost for the property maintenance staff to clean up trash around the shops and parking lot.

When a certain expense is not specifically addressed as a component CAM expense in the text of the lease, the ambiguity can become an issue that must be resolved between the landlord and tenant.  This is actually a common problem and both parties must work to find a reasonable resolution to the matter.

Your question suggests that your lease does not specifically define the CAM costs that you are responsible for paying each year, and that you are not in agreement with some of those you believe are unfairly included.  If this is the case, it will be necessary for you to ask your landlord for a copy of the "chart of accounts" that shows the component line item expenses and corresponding subtotals included in the total CAM costs for each annual CAM billing period.   Review the expenses included and request further information about the expenses that you do not understand.  If you don't believe that certain of the included charges should be considered CAM expense, it will be up to you and your landlord to come to an agreement over the questioned items.  Don't be surprised if your landlord refuses to provide you with any of the supporting materials that would allow you to review the basis of his CAM allocations.  You may find that it will be necessary to get a professional ( Attorney, Professional Property Manager, Lease Auditor, etc.)  to assist you in this process.   If enough money is in dispute, you may find it necessary to resolve the dispute in court.  Be careful to compare the savings you may gain with the cost of taking your case to court.

If you have any additional specific concerns in this matter, please do not hesitate to forward a follow-up question.

Good luck.

-Jim Avancena