Common Area Maintenance (CAM) refers to the costs associated with maintaining and managing shared or common spaces within a multi-unit property, such as shopping centers, office buildings, or apartment complexes. These common areas typically include hallways, parking lots, lobbies, elevators, landscaping, security, and other communal facilities. Property owners or landlords charge tenants a proportionate share of CAM expenses as part of their lease agreements, usually on top of base rent. Common Area Maintenance charges typically cover expenses such as cleaning, repairs, utilities, and general upkeep. Clear and transparent CAM provisions are essential to ensure equitable distribution of these expenses among tenants and maintain the property’s overall quality.
Examples of Common Area Maintenance
Common area maintenance (CAM) expenses encompass various upkeep and operational costs shared among tenants. Some examples include:
- Lawn and Landscaping: Maintaining communal gardens, lawns, and green spaces, which include mowing, trimming, and seasonal landscaping.
- Hallway Cleaning: Regular cleaning and maintenance of common hallways, stairwells, and shared entryways.
- Security: Expenses related to security measures, such as surveillance systems, access control, and security personnel if applicable.
- Trash Removal: Costs associated with trash collection and disposal services for common areas and dumpsters.
- Common Area Lighting: Electricity bills for lighting in hallways, parking lots, and other shared areas.
- Elevator Maintenance: Repairs and maintenance of shared elevators, if applicable.
- Utilities: Water, gas, and electricity expenses for common areas that are not individually metered.
- Snow Removal: Costs for clearing snow and ice from parking lots and walkways during winter months.
Calculating Common Area Maintenance fees
Common Area Maintenance (CAM) expenses are typically prorated among tenants based on factors like square footage, number of units, or other equitable methods outlined in lease agreements. These fees are calculated by dividing the total cost of maintaining and operating common areas within a property by the number of tenants or units sharing those spaces. The formula for CAM fees is:
CAM Fees = (Total CAM Expenses) / (Number of Tenants or Units)
Property owners or landlords usually perform a CAM reconciliation at the end of a defined period, often annually. They calculate the actual expenses incurred for common area maintenance during that period and compare it to the estimated expenses collected from tenants throughout the year. Tenants may then be billed the difference, or they may receive a credit if they overpaid.