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How should you handle a sudden jump in your CAM fees?

On Behalf of | Jun 11, 2021 | Small Business |

You have a commercial lease, you already likely pay a premium for your rental space. If you share parking lots, bathrooms or other facilities with neighboring tenants, you will likely have additional costs.

Common area maintenance (CAM) fees are a way for a landlord to pass on certain property management expenses to tenants. Most of the time, you lock in a specific CAM fee rate when you sign your lease. However, your landlord might try to claim additional CAM fees due to an unexpected repair or drastically raise your fees when you renew your lease. How do you respond to that?

Prepare to negotiate with your landlord

Landlords want to turn a profit when they rent out their facilities, but there’s a difference between cost-sharing and extortion. When a landlord already knows that you have to incur costs to move, they may feel they are in a position to push you around.

You need to prepare to negotiate when CAM fees don’t reflect the real costs of managing the property. You don’t have to agree to pay unreasonably high costs.

Documenting your use of shared spaces versus the use of other tenants could help you. The same could be true of price shopping for the services your landlord provides. Quotes from other companies can help make it clear you know how much they overcharge you for security or parking. You might even consider talking with other landlords so that you can have a backup option if negotiations fall flat.

Understanding your rights as a commercial tenant can make it easier for you to negotiate your lease and other costs when your landlord wants to overcharge you.