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Commercial Real Estate Investment/Reconciling CAM Charges on Purchased Business


I purchased a business on April 1st 2012.  I just received my first year end CAM Reconciled charges and it says I owe the landlord over $7,300 for the past year.  The landlord says the bill is not just for April - Dec but instead from Jan - Dec.  This means I am being billed for 3 months when I didn't own the business and CAM was being under billed.  So I am essentially paying $1,800 ($7300 / 12months x 3months I didn't own it) more than I feel I should.

Do I have any option here?  Shouldn't they bill the old owner for those 3 months?   

(Note the landlord told me the increase in costs is almost all in increase cost for garbage, water, and sewer).

Thank you very much in advance for your help!


Since you now are the tenant with possession of the leased premises, your lease very likely gives the landlord the legal right to collect the 2012 CAM charges; the full amount it has billed,  from you.   Unless your landlord has calculated your CAM charges incorrectly - and that does occur from time to time - your landlord will not be the least bit interested in the fact that the prior occupant had possession for the first three months of Calendar 2012.

In equity, it seems that the prior tenant should recognize the reasonableness of paying you for the ratable share of the CAM bill for the first three months of 2012.   However, I am sure that there were many conversations between the two of you at the time the purchase was being negotiated and there may be matters that the seller may feel mitigate its responsibility to reimburse you.

You need to work this out with the seller and not withhold paying the CAM bill when it is due.  Note again that you do have the right to assure that the CAM charges have been complied in accordance with the terms of the lease.  

Good Luck,


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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.

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

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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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