Understanding Commercial Real Estate Management - Common Maintenance Area And Associated Charges

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Understanding Commercial Real Estate Management -
Common Maintenance Area And Associated Charges
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What is Common Maintenance Area?

• The common area in a commercial property premise
  refers to the set of all those physical spaces
  which are accessible to all the tenants of the
  property, the landlord and also the invitees of
  the landlord and any of the tenants. It generally
  includes the lobbies, corridors, staircase,
  parking lots, washrooms, elevators etc.

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Who pays for it?

• Every tenant within the premise of the commercial
  property owns the common maintenance area
  equally. Commercial real estate management
  usually builds an inclusive management structure
  which charges each tenant for the maintenance and
  development of the common area.

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How do you pay for it?Here are five things you
need to know in order to understand the process
of CAM payment

• Common maintenance area charges form a part of
  the total charges levied upon a tenant in
  accordance with the Triple Net Lease. A
  commercial property for lease is bounded by a
  payment structure in which the tenant pays the
  proportionate share of all common charges along
  with the basic rent.
• The CAM charges are determined during the
  signing of the lease documents between the
  landlord and the tenants. The landlord tries to
  include most of the operational costs into the
  CAM charges, whereas the tenants try to turn the
  direction of negotiation otherwise.

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How do you pay for it?Here are five things you
need to know in order to understand the process
of CAM payment

• The uncontrollable charges include the security
  expenses and the costs of basic utilities. The
  remaining charges, like lighting, landscaping
  etc., termed as controllable are subject to the
  negotiation during the preparation of the lease
  document.
• In case of a commercial property with multiple
  tenants, the property owner tries to standardize
  the charges among all the tenants. The CAM is
  divided among the tenants in proportion to the
  tenants rented area to the total rent-able area
  in the property.

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Commercial real estate services and the CAM

• Commercial real estate services manage the common
  maintenance area as well its charges on behalf of
  a property owner. They also oversee the auditing
  and reporting of the common maintenance charges,
  and avoid any confusion which might arise between
  the landlord and the tenant over CAM charges.

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