Common area maintenance, or CAM, charges refer to the amount you pay to the landlord or property manager for the maintenance of common and shared spaces in a building. These include hallways, elevators, public balconies, reception areas, driveways, landscaping costs, and so on.
Normally, the landlord estimates the annual CAM charges and distributes the cost among tenants on their monthly rent. They can then reconcile these figures at the end of the year to determine if the actual cost was higher or lower than the amount paid by tenants.
But how do you know the CAM charges you should be paying to ensure you’re neither overpaying nor in debt? Your landlord is likely to use one of the following methods to calculate charges for common area maintenance. If you feel like you’re overpaying for these charges, talk to a real estate lawyer near you.
Applying a Fixed Fee
Popular among small property owners and managers, using a fixed fee means that every tenant pays an equal amount of CAM charges per month.
Here, the landlord assesses and predicts the likely annual cost of maintaining common areas and divides it equally among tenants on their monthly bills.
As a Percentage of the Total Leasable Area
This is the most preferred approach among property managers and the business community. However, the technical calculations can be challenging to follow through, especially if this is your first time.
Through this approach, the amount you pay as CAM charges is equal to the percentage of the building’s gross leasable area that you occupy.
For instance, if you’ve leased 1,000 square feet in a property with 10,000 square feet, you are responsible for 10% of the building’s total maintenance charges. This figure is then divided by twelve to present your monthly CAM charges.
Talk to a Real Estate Lawyer
CAM charges cause many landlord-tenant disputes that sometimes end up costing businesses a lot of time and money.
You can avoid this by having a real estate lawyer review your lease agreement with a landlord before signing. An attorney can educate you on the laws and legal terms, as well as help you negotiate your charges if there’s a need to. A lawyer on your side helps guarantee that your rights as a tenant in Texas are respected.