What are CAM fees in commercial real estate and how do they affect your lease?
Common Area Maintenance or "CAM" fees are charges incurred in a commercial lease. CAM is paid by a tenant to their landlord. CAM is charged on top of the basic rent and caters for maintenance expenses incurred for work on the common area of a property. For example, in an office park, the tenants will pay CAM for the gardening on the office park.
Each tenant is expected to pay for their share of CAM charges. The CAM charged
to each tenant is determined by rented square footage in relation to the total
rentable square footage of the property.
For example, If the tenant rents 1,200 sq. meters of office space; the total rentable space is 20,000 sq. meters; and the CAM fees total $18,000:
CAM charges can be either fixed or variable. It is recommended that a tenant get
an expert opinion from a lawyer so as to be well informed on how the charges will
affect their business in the long term.