CAM Charges Review: Understand What You Are Actually Paying
CAM charges — Common Area Maintenance fees — silently add 30–60% to base rent in retail contracts, yet most tenants sign without understanding what they cover or whether they are capped. Overcharges are routine: a 2023 industry study found that 75% of tenants who exercised audit rights discovered billing errors, with an average overcharge of $0.47 per square foot per year. Employment Contract Review reviews every CAM provision in your commercial contract — identifying missing caps, improper capital pass-throughs, and missing audit rights before they cost you thousands.
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Why Use Employment Contract Review?
CAM Inclusion and Exclusion Audit
We map exactly what is included in CAM — and what should be excluded. Capital expenditures, above-market management fees, depreciation, and costs that only benefit other tenants are commonly included improperly and must be challenged before signing.
Annual Cap Verification
An annual cap on controllable CAM increases (typically 3–5%) is your most important protection against runaway occupancy costs. We flag the absence of a cap as a critical risk and recommend specific cap language to request.
Audit Rights Analysis
Your right to audit CAM statements — and the window within which you must exercise it (usually 12 months after receiving the reconciliation) — is essential for catching overcharges. We identify exactly what your audit rights are.
Gross-Up and Base Year Review
Operating expense contracts use base years and gross-up formulas that can inflate your expense share significantly. We explain how the base year was set and whether the gross-up calculation is standard or advantageous to the landlord.
Management Fee Cap Review
CAM management fees typically range 3–15% of other expenses. Uncapped fees allow landlords to charge disproportionate management costs. We identify the fee structure and whether it is within market norms.
Reconciliation Rights Review
Annual CAM reconciliation can result in large unexpected charges or refunds. We review your reconciliation timeline, your right to dispute charges, and any retroactive billing limitations that protect you.
What Your AI contract Review Looks Like
Here's a preview of the kind of analysis Employment Contract Review provides for this type of contract.
Risk Score
Flagged Issues
contracts that allow controllable CAM expenses to grow without limit year over year. In active markets, uncapped CAM has grown 15–20% annually — turning a manageable rent into an unaffordable one by year 3 of a 5-year contract.
Language such as "costs to maintain, repair, or replace building systems" that allows the landlord to amortize a new $200,000 roof or parking lot repaving into your annual CAM — converting capital improvements into recurring operating expenses.
contracts that contain no provision allowing tenants to request and review CAM expense documentation. Without audit rights, you cannot verify that charges are legitimate, accurate, or properly allocated.
Gross-up provisions that calculate your expense share as if the building is 100% occupied, even when the actual occupancy rate is lower — meaning you effectively subsidize vacant tenants' share of expenses.
Management fees with no percentage cap, or caps above 15%, allowing the landlord to charge disproportionate administration costs that inflate total CAM. Some contracts allow management fee increases independent of actual CAM growth.
contracts permitting landlords to issue CAM reconciliations 6–18 months after year-end, creating large retroactive bills that are difficult to budget for and challenge after the fact.
Disclaimer: Employment Contract Review provides AI-powered informational analysis and is not a law firm and does not provide legal advice.
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Employment Contract Review provides AI-powered informational analysis and is not a law firm and does not provide legal advice.