How should a business negotiate the payment of common area maintenance fees?
The tenant is usually required to pay a proportionate share of expenses for maintenance of the common areas of the building (which may include real estate taxes and costs of comprehensive casualty and liability insurance coverage) based upon the ratio of the square footage being leased and that of the total leaseable square footage to all tenants (‘CAM’). If a tenant leases 10 percent of the building or shopping center but the other 90 percent is vacant, he’ll want to make sure that the formula is based on the total that could be leased (not the total that is actually leased) or he could get stuck paying 100 percent of the common maintenance costs. Also, tenants should be sure to measure the actual space they will be occupying so the CAM is based upon the usable square footage and not the total rentable square footage if not so intended. How can a business define the expenses to be included in the formula for CAM and cap the pass-through? Some landlords will try to include in CAM, as p
Related Questions
- Our association has several owners who are delinquent in the payment of their maintenance fees. How can CA help us to collect these amounts and improve the association s cash flow?
- How should a business negotiate the payment of common area maintenance fees?
- Are there any CAM (Common Area Maintenance) charges?
