Common area maintenance (CAM) charges are fees that commercial tenants pay to cover their share of the costs of running a property’s shared spaces. Those spaces can include parking lots, lobbies, hallways, restrooms, landscaping and exterior lighting.
CAM charges are most common in triple net leases and other commercial leases where the tenant pays part of the operating costs in addition to base rent.
What CAM usually includes
The lease defines exactly what counts, but typical CAM costs include:
- Landscaping and snow removal
- Parking lot sweeping, striping and repairs
- Janitorial service for shared areas
- Common area utilities and lighting
- Security and fire safety systems
- Repairs to shared building systems
- Property management or administrative fees, often as a percentage
Property taxes and building insurance are sometimes included in CAM and sometimes billed separately. Many leases exclude capital expenses, or allow them only when amortized over their useful life.
How to calculate a tenant’s share
Most leases use a pro rata share based on square footage.
Pro rata share = Tenant’s leased square feet / Total leasable square feet
Tenant CAM = Total CAM costs x Pro rata share
For example, a hypothetical tenant leases 2,400 square feet in a 20,000 square foot retail center. Their pro rata share is 12%. If annual CAM costs are $90,000, the tenant’s share is $10,800, or $900 a month in estimated payments.
Why it matters for landlords
Clear CAM terms prevent disputes. Spell out what is included and excluded, how admin fees are calculated, whether there is a cap on annual increases, and when reconciliations are delivered. Then keep detailed records so you can back up every charge.
Tracking estimates, actual costs and year-end true-ups by tenant is a lot of bookkeeping. TenantLoop supports commercial leases with CAM, so recurring charges and reconciliations live alongside the rest of your accounting. Our commercial lease guide covers the bigger picture.
Related terms
Related questions.
What is a CAM reconciliation?
Tenants usually pay estimated CAM charges monthly. After the year ends, the landlord compares actual costs with what was collected and either bills the tenant for the shortfall or credits the overpayment.
Can tenants audit CAM charges?
Many commercial leases give tenants the right to review or audit the landlord's CAM records within a set time. Whether that right exists, and how it works, depends on the lease language.