What Is a CAM Fee? (Common Area Maintenance Fee)

Lease Term: Understanding the CAM Fee

Letting agent showing business people around empty office
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Before you sign any commercial lease, it is important that you understand what you are paying for.  CAM fees are fairly common in commercial leases but can vary considerably.  Be sure to ask questions about what is included in fees (like CAM fees) padded into rent and how those fees may be increased each year.  For example, some leases may cap rent increases to a reasonable percentage, but CAM fees may go up at a different percentage rate.

Knowing what you will be responsible f for paying for during each year of your lease will help you make better long-term decisions about whether or not a particular space that seems good now will still be affordable in subsequent years.

What Is CAM?

CAM is an acronym for "Common Area Maintenance." In commercial real estate, many leases require the tenant (lessee) to pay a portion of CAM fees.

There are two basic calculations for CAM fees: Variable CAM fees, in which the amount a tenant is required to contribute increases based on a number of factors; and flat CAM fees where the fees are a fixed amount.

CAM expenses are based on a pro rata basis. Simply put, the more leased square footage, the greater the percentage of CAM expenses the tenant pays.

CAM fees vary considerably and cover a wide range of expenses landlords pay including repairs, insurance, property maintenance, and even in some cases salaries of administrative staff who run a business park.

Because CAM fees can be complicated and expensive, it is highly advisable to have an attorney review any lease that has CAM (or any other special fee) requirements before a business owner signs the lease.

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