CAM stands for Common Area Maintenance, and they are fees that are paid by tenants to maintain the areas, both in housing developments or commercial complex, such as the following:

• Lobbies

• Corridors

• Elevators

• Staircases

• Clubhouse

• Libraries

• Store Rooms

• Garden & Parks

• Driveways

• Parking Spaces

• Roof Terraces

• Play Areas

Also included in the CAM fee are security systems and personnel, reception services, janitorial and cleaning services, painting, flooring, administration and management, repair and replacement of roof lighting, plumbing, wiring, landscaping, and even snow removal. These maintenance costs are usually averaged every year.

Another way of understanding these terms is to consider the space you are renting with two separate areas -- the usable areas and the common areas.

1.    Useable Area

The usable areas are the spaces you are renting, and this includes rooms, restrooms, or offices within the square footage indicated in your contract.

2.             Common Area

The common areas are the spaces outside the area you are renting and are available for the tenants to use. The common area includes the reception area, the gardens outside, the walkways, lobbies, parking lots, and the elevators or function halls' usage. 

How CAM fees work

In non-industrial spaces, CAM fees are also referred to as load factors fees, rentable building area fees, or gross building area fees. The landlord or property manager pays these dues, but those expenses are then divided and charged to the tenants. Precisely what is being set and at what percent is usually discussed when the agreement is first drawn up. 

A lease agreement should include:

• A list.

• A description of all the areas.

• An understanding that it is the management's responsibility to keep all those areas in good condition.

There are four kinds of lease agreements: 

1. gross lease

2. modified lease

3. net lease

4. triple net lease

A gross lease is a full-service lease that includes all operating costs, taxes, and common area maintenance costs. A lease wherein expenses are divided between the tenants, and the landlord is referred to as a modified lease. The net lease, wherein a tenant pays only a share of the operating costs in addition to the rent. And the triple net lease, or commonly known as the NNN or net-net-net, where the tenant pays all the operational expenses, including the taxes and insurance. These types of leases and their conditions are essential when discussing the terms of the rent. First-time lessees can find this confusing and frustrating if caught off guard with all the common area maintenance charges.

Collecting common area maintenance fees is one of the advantages of owning a property that others are interested in renting. To attain and maintain the level of convenience and comfort of living or doing business in the area, property owners must ensure that the CAM fee payments are being used at the highest standards. These will have significant benefits in maintaining the property's value in the future as well. But for tenants, it can become a burden and frustration if they were not informed of the importance and benefits of having a common area maintenance system.

For more information, you may reach us at  info@cbi-commercial.com.