Common Area Maintenance (CAM) Charge Agreement

Common Area Maintenance (CAM) Charge Agreement

A Common Area Maintenance (CAM) Charge Agreement is a provision often included in commercial leases which outlines the responsibilities and costs associated with maintaining shared spaces within a property. These shared areas may include lobbies, hallways, restrooms, parking lots, landscaping, and other communal facilities that benefit all tenants.

The CAM Charge Agreement specifies how maintenance costs are calculated, who is responsible for the payments, and how those costs are allocated among tenants. Typically, these charges are proportional to the amount of space occupied by each tenant in relation to the total leasable area. For instance, if a tenant leases 10% of the total space, they may be responsible for 10% of the CAM costs.

The agreement may cover various expenses, such as:

1. Repairs and Maintenance: Regular upkeep of common areas to ensure they remain functional and aesthetically pleasing.

2. Utilities: Costs associated with water, electricity, and gas for shared spaces.

3. Landscaping: Maintenance of gardens and outdoor areas that are accessible to all tenants.

4. Insurance: Premiums for liability insurance covering common areas.

It’s essential for tenants to review the CAM Charge Agreement carefully, as the costs can significantly impact their overall leasing expenses. Transparency in how these charges are calculated and reported can prevent misunderstandings and disputes between landlords and tenants.