Commercial Real Estate Investment/charge for cam and snow removal

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Expert: - 11/18/2007


Question
I have a business of renting to residential properties and the tenant is responsible for snow removal, except that of a multi-unit.  We are setting out to rent a space for our office and I was surprise when the lease said we had to pay cam cost AND he will plow the parking lot but he will addd the cost as additional rent.  There are 11 other units in the same center as me and it also states that I am responsible to remove the snow from the sidwalk by my office.  I live in New Jersey and was wondering if I shoud have to pay for the entire lot.

Answer
Dina-

If I understand you correctly, what you described is exactly how all of the snow is removed and also the way the cost is allocated for single story commercial property -commonly that means retail centers.

Each individual tenant is responsible for removing the snow around their own premises; that is the sidewalks or other concrete apron areas around their own office or store, especially their doorway.  If the landlord didn't require each tenant to be liable to do this; many tenants could make claims that the landlord was liable for their office being closed because clients or employees couldn't get in thru all the built up snow or the store did not have any customers because of all the snow around their shop and sidewalks, and make a claim for business losses!
That still happens but the reason claimed is because the parking lot wasn't cleared and cars couldn't get into the parking lot.

You probably are dollars ahead on that basis though, because the landlord would probably charge the tenants twice what it should cost to clear the snow from around you shop or office, and then charge that inflated amount back to each tenant as a CAM cost.

The landlord clears the parking lot because tenants with snow shovels could not hope to clear the parking lot in every snow storm.  That job takes heavy clearing and moving trucks and equipment, as well as tons of salt and salt spreading attachments.  

I have always found that many tenants make arrangements with the porters that work around the project to pay them to clear their sidewalk and doorway entrances as a side agreement.  

As long as you are certain that each tenant is only paying for their fair share or "ratable share" of the costs of the snow clearing of the "entire lot" in their CAM charges, that is the standard practice in the industry.

Sorry I couldn't be of more help.  Please feel free to ask whatever you need to know about other CAM, other lease costs, or your lease in general. CAM costs are a subject that is often controversial.

Good luck.

-Jim

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Jim Avancena, CPM

Expertise

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.

Experience

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.

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

Publications
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".

Education/Credentials
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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