CAM charges are the cost that a landlord pays to operate and run a commercial property. It stands for common area maintenance and is usually interchangeable with the term operating expenses. This would include the common area maintenance, charges for cleaning up common areas, security for the property, property taxes, property insurance, repairs and maintenance. These items are all paid by the landlord and are sometimes passed through to a tenant.
When it becomes important for tenants is to negotiate whether you can cap those common area charges, whether you can take advantage of decreases in common area charges and get refunds if the costs go down, and whether you can protect yourself against increases in common area charges that normally a landlord wants to pass through. Also, you can negotiate what’s included in common area charges and what’s not. We might tell a landlord that we’re not going to pay for particular items if you have enough leverage or if your broker knows where to spot those areas that can be negotiated.