Commercial Real Estate Investment/CAM charges for past years


I am in southern California.  My landlord (actually the management company that he just stopped working with - now being handled by 󮥰hew����ust sent me an Adjustment for the 󡣴ual����M for 2009, 2010, and 2011.  I understand that I can be billed for additional CAM expenses for the past year if capital improvements or such have been made.  It has happened once in the past 10 years.  Based on the invoices there do not appear to be any big improvements and most of the fees are for management and parking.  Is it legal to present me with charges from 2009 and 2010?  The amounts due are double the NNN I pay every month.  How is it possible it could be double for three years and they are only just billing me now?   Meanwhile, my lease was due to end at the end of December but several months ago I negotiated a new lease.  They did not disclose any change in the NNN costs during these negotiations. Based on this my negotiations would be different or I would not have renewed my lease.  Do I have any any recourse here?  Also, I do not believe the NNN is comparable to other centers in the area.  
I hope I have been clear in my description of my situation and I look forward to any advice you can provide.

Thank you


I think that some unintended code got mixed into the text in your 2nd sentence.  However, I get the sense of your problems from the remainder of your correspondence.  I have several comments in response.

First of all, this appears to be primarily a legal matter that you will need to retain an attorney to handle for you.

Unfortunately, it is not uncommon for a landlord to mismanage its responsibility for billing the tenants of a property for CAM and capital expenditures on a timely basis.  Further, many property owners make errors in their calculations of the charges that a tenant owes.  

Often, the decision of if you should challenge your landlord's questionable reimbursement bills is based on comparing the total amount of the questioned charges to the likely cost you will incur to get a specialist to represent you in: 1.) Making an accurate determination if you have in fact been overcharged (which can be a VERY difficult process because landlords are not usually eager to assist in this effort) and then, 2.) Proving to your landlord or the local courts that you have been overcharged. Normally the expense of a challenge is not cost effective.     

Let me address some of your direct questions contained in your correspondence.  

In some geographic areas in this country, the law allows a landlord to legally assess you for expenses it incurred in prior years provided those prior years were during the term of your current lease.   In other areas such practice is not legally valid.   You will need to get an attorney in your area to discuss this matter with you.

Secondly, you must read the text of your lease provisions related to CAM expenses and capital improvements very carefully to determine if the charges being assessed to you are properly charges you should be allocated by your landlord.  This is a very complicated matter for a tenant to determine successfully without the assistance of an attorney specializing in Landlord/Tenant law or, as I stated above, a specialist with commercial property management knowledge.     

Do you have any recourse here?  You state in your correspondence that you "negotiated a new lease" and then follow that up saying you have "RENEWED" your lease.  If you have actually signed off on a new lease document you have some very limited amount of leverage if the renewal term has not yet started, but again, you should discuss your legal and not so legal options with an attorney.  I am not an attorney so I cannot suggest or discuss legal options with you.  But here again, it all involves you spending funds on legal fees.   If you have a law school  in your area you may be able to find law students that are willing to help you with this problem, but make a sensible determination of the real talents of your student help.

I suggest that the next time you are going to take on a new and costly lease obligation, that you consider hiring a knowledgeable (no well intentioned rookies)commercial retail broker to assist you since they would likely have avoided some of the difficulties you are involved with now and their fee is usually absorbed by the landlord.

Having made the above statements, if you would like to send me in a follow up letter containing ALL of the text in your current lease dealing with CAM and capital expense reimbursements - - VERBATIM - - it may be that I can give you some more meaningful insight into your situation.

Good luck,

- Jim  

Commercial Real Estate Investment

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Jim Avancena, CPM


Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.


Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

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