Is your business looking to lease commercial space in the Bay Area? If so, it is crucial that you understand the implications of all provisions of your lease agreement, including Common Area Maintenance (CAM) charges. Here, our California business attorneys provide a comprehensive overview of the key things commercial tenants need to know about CAM charges.

What is a Common Area Maintenance (CAM) Charge?

A Common Area Maintenance (CAM) charge is a fee that tenants of commercial properties pay to cover the cost of maintaining shared spaces, such as lobbies, hallways, parking lots, and elevators. Along with other expenses, a CAM charge may cover the following:

• Cleaning;
• Landscaping;
• Security;
• Repairs; and
• Utilities.

Most often, CAM charges are calculated as a percentage of the tenant’s rent. The lease agreement should specify how the charges are calculated and what expenses are covered. Notably, CAM charges can vary widely depending on the property and the lease agreement.

A Commercial Lease May Have CAM Caps and CAM Floors

A commercial lease may include CAM caps and CAM floors to help smooth out potential variances in CAM charges. CAM caps are the maximum amount that a tenant will be responsible for paying towards the CAM charges, even if the actual costs exceed that amount. CAM floors, on the other hand, set a minimum amount that the tenant must pay towards CAM charges, even if the actual costs are lower. These provisions help to provide predictability and stability in regard to CAM charges.

Tip for Commercial Tenants: Understand the Specific Costs of CAM Charges

A useful tip for commercial tenants when it comes to CAM charges is to ask for a specific breakdown of the costs included in the charge. Doing so will help tenants understand what expenses are being covered and ensure that they are not being charged for expenses that are not applicable or excessive. It is important to beware of large, unspecified fees that may be included in the CAM charge. You do not want to pay for a common area expense that should not be your responsibility.

Businesses Have the Right to Negotiate All Terms in a Commercial Lease Agreement

Businesses have the right to negotiate all terms in a commercial lease agreement, including the length of the lease, rent amount, security deposit, and other provisions such as CAM charges and other maintenance responsibilities. Negotiating a lease can help businesses secure more favorable terms. It is imperative that you thoroughly review the lease agreement before signing. Our Bay Area commercial lease attorneys can help you ensure that your rights and interests are protected.

Contact Our Bay Area Business Lawyers for Help With a Commercial Lease

At Coepio Legal, our California business law attorneys have the skills, knowledge, and experience to draft, review, and negotiate commercial leases for tenants. If you have any questions about your commercial lease agreement, we can help. Contact us to set up your fully confidential, no-obligation consultation. Our law firm represents businesses in San Francisco and throughout the wider Bay Area.