Understanding CAM Charges Is Essential for Florida Commercial Landlords
As commercial landlord and tenant attorneys who help ensure that landlords have enforceable commercial leases and experienced counsel to help with any disputes, one of the issues that we frequently assist landlords with here in Florida are common area maintenance, or “CAM” charges. These charges have a significant impact on the property’s net operating income and how much tenants pay. However, disputes can arise with tenants when it comes to CAM charges because unique situations may require costs to be calculated in a way that is different than what is spelled out in the current lease terms. As a result, it is important for commercial landlords to have a thorough understanding of what CAM charges are/include and how to properly account for them in the lease, with the assistance of an experienced attorney. Below, we discuss what CAM charges are, what’s included in them, the types of commercial real estate leases that do and do not include them, and how they are calculated: What They Are/Include While CAM charges are very generally maintenance costs related to managing and maintaining commercial property, there really is no one definition as to what exactly is included in them because they vary based on the market and the property. They are designed to provide property owners with some protection from increasing costs so that the property’s return on investment isn’t significantly impacted. These charges typically include the cost of cleaning, maintaining, and repairing common areas of leased property, although the exact charges depend upon the exact lease that the landlord and tenant agree on; they can be limited to a few items, or they can be broader, covering expenses related to: Bathrooms Elevators Hallways Lawn care & landscaping Parking lots Sidewalks Snow removal Utilities Needs that are unique to the property, such as security, building repairs, property management fees, administrative costs, permit expenses, property taxes, property insurance, and anything else landlord may want to include. While these costs can sometimes be scary to the tenant, they can also be beneficial in that landlords will sometimes put off maintenance costs if they have to bear the cost themselves. Where They Appear In Commercial Lease Terms Not all properties include these charges. They tend to be included in industrial, retail, and warehouse spaces; while office spaces tend to include them in the rent. Specifically, the following types of commercial real estate leases tend to involve some type of CAM charges: Triple net leases : The tenant tends to pay CAM charges and takes on all of the responsibilities in terms of paying their share of property taxes, insurance, and common area maintenance. The only responsibility landlord has is covering the capital expenditures, which means repairs to the property; although expenses can vary depending on what landlord and tenant have agreed on during lease negotiations. These types of leases tend to apply to retail properties, such as shopping centers and restaurants Net leases : The landlord pays for the common area maintenance while the tenant pays for property insurance and taxes. This type of lease is less common but it is attractive to some tenants because it minimizes risk. It is also sometimes seen where multiple properties share common area expenses, however, the base rent is higher Gross leases : Very common in office buildings; where the landlord covers common area maintenance, property taxes, and insurance, and tenant pays flat rent rate without fluctuation based on insurance, maintenance costs or property taxes. The landlord will even sometimes cover utilities. How They Are Calculated It is important for property owners to work with attorneys so as to ensure that the leases are structured so as to maximize the return on investment. This typically involves passing CAM charges onto the tenant. However, how CAM charges are calculated also matters. The most common way they are calculated is based on square footage of the property, where each tenant pays their share of the property’s expenses based on the space occupied by dividing the total cost of maintenance by the square footage of the property to get cost per square foot. However other options are: Load factor: whatever percentage of the building is used as a common area is added to the square footage of the space rented, which then gives you rentable square footage to base rent on Fixed: property owners set a flat fee for common area maintenance and work in small annual increases to cover inflation. You see some shopping malls doing this Capped charges: some tenants may attempt to negotiate a cap on how much they will be required to pay towards common area maintenance Contact Our Florida Landlord & Tenant Law Attorneys Commercial landlord and tenant law can be extremely complicated, especially when disputes arise. As a result, building in every precaution to your lease with your tenant is the best way to protect yourself as a commercial landlord. We can help you ensure that you have the best enforceable commercial lease. Contact our Tampa commercial landlord and tenant lawyers at HD Law Partners to learn more about our services today. Resource: https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/commercial-real-estate/cam-charges When Commercial Tenants Fail to Pay Rent Posted in Homeowners Association, Landlord Tenant | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us