Expert: Mike Fortunato - 9/13/2009

Question
Is it common for a landlord to layer fees such as admin fee, management fees, administrative/management fees, repair and maintenance admin fees...?

Our lease states there is an admin fee and reasonable costs and expenses relative to operating, managing, and equipping the Common Areas.  The new landlord believes they have the right to charge a fee for every aspect.  Enlighten me.

Answer
Sometimes there are various fees which are legitimate, but I'm unable to determine what is reasonable in your case since I don't know the details (your retail center, the lease, how the landlord operates the center, etc). Generally speaking, there are situations where there is a common area maintenance surcharge, in addition to the management fee (management fee is to manage the building itself and the tenants; CAM surcharge is to arrange for services to the common areas). This is often seen in multiple owner shopping centers where one parcel owner is charged with handling the common areas (and thus they are entitled to a fee for that service). In larger centers, there may also be on site staff and associated admin expenses.

I would recommend requesting backup of those charges to determine what is reasonable and allowable under the terms of your lease. The fees must have a purpose...they shouldn't be purely ficticious to the benefit of the landlord.