Common Area Maintenance Charges
Also called: CAM Charges · Service Charge Clause
Common area maintenance (CAM) charges are a tenant's share of the cost of maintaining shared spaces in a commercial property — lobbies, parking, landscaping, shared utilities — billed on top of base rent, typically proportional to the tenant's occupied floor area. Without clear terms, these charges can become a significant and unpredictable additional cost.
In more detail
CAM charges are a common source of commercial tenant disputes precisely because they're variable and landlord-controlled — the tenant is essentially trusting the landlord's accounting of shared costs, unless the lease gives them a way to actually verify it.
A well-drafted CAM clause caps annual increases, defines exactly what expense categories are includable (and explicitly excludes things like the landlord's own capital improvements or unrelated costs), and gives the tenant audit rights to review the underlying expense records.
The proportional allocation method matters — whether it's based on occupied square footage relative to the total leasable area, and how vacant units' share is handled, can materially affect what an individual tenant actually pays.
A retail tenant's lease requires CAM charges proportional to their unit's share of the building's total leasable area, capped at a 5% annual increase, with the tenant entitled to request an itemised breakdown and audit the landlord's CAM expense records annually.
What our lawyers check
- Whether CAM expense categories are clearly defined and reasonable
- Whether annual increases are capped
- The proportional allocation methodology
- Whether the tenant has audit rights over the landlord's CAM accounting
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
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