Commercial real estate: Scrutinize what's included in CAM fees

Most commercial tenants end up paying at least some common area maintenance fees whether they rent space here in Nashville or elsewhere. However, that does not mean that a commercial tenant should not scrutinize that portion of the commercial real estate lease prior to signing it. Since these costs make up part of the rent, it is important not to pay more than necessary or to pay for something that may not ordinarily be considered a common area maintenance item.

CAMs, as they are commonly referred to, commonly include items such as routine maintenance, repairs and insurance, but landlords may attempt to include other items as well. The property owner may require tenants to pay a portion of the buildings insurance and taxes, for example. Sharing these costs with tenants may seem reasonable, but without fully understanding what it is a commercial tenant is supposed to help pay for, the property owner could include just about anything relating to the ownership and upkeep of the building.

The items may not be the issue. The issue may be the percentage or the potential increases in cost from year to year or even from month to month. A commercial tenant may want to be sure it pays a reasonable percentage based on the square footage of the rental space. It may also be a wise to negotiate how high these costs can go and how much they can fluctuate from month to month.

A commercial tenant looking to rent space here in Nashville, or anywhere else for that matter, should not take for granted that any caps on rental payments include keeping the CAMs at a reasonable amount. These costs are often considered separate from the rental amount from the space and can push the tenant’s payment obligation up considerably. For this reason and many others, a prospective tenant may want to review a proposed commercial lease with an experienced real estate attorney before moving forward.

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