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Watch out for CAMs in your commercial lease

If you are a new small business owner looking for a commercial space to rent, you may not be entirely familiar with the commercial leasing process. You may know that you shouldn't sign the first lease a property owner hands you, but you may not be clear on what happens next.

The payments for a commercial space begin with a base rent that the landlord usually calculates as an amount per square foot. Then other charges are added. One of those additional charges are for common area maintenance items.

What kinds of things make up CAMs?

A variety of things can constitute CAMs. What you want to do is scrutinize those items to see whether it is something you should pay for or not. You may be able to negotiate what items are included in your CAMs, along with how much you will pay for them and the maximum amount for which you will be responsible. The following items are often included in this category:

  • The property owner's management and administrative costs
  • Electrical, sewer and plumbing
  • HVAC maintenance for the common area
  • Parking lot lighting, striping, refurbishment and repair
  • Common area utilities
  • Landscaping
  • Center signage
  • Trash removal
  • Real estate taxes
  • Pest control services
  • Janitorial services
  • Insurance, including liability
  • Security

As you can see, you will be expected to pay a portion of many of the above items. How much you pay also depends on the type of lease you enter into with the property owner. However, if there is something included that you do not believe you should be responsible for a paying a portion of, you should feel free to mention it. You may not be able to eliminate the charge, but it may be possible to pay a lower portion of it.

More than likely, you will not be able to avoid paying a portion of certain CAMs since they are necessary in order to keep the building up and running for your business. The more attractive the common areas are, the more likely your customers and clients will frequent it. Unless there is an item that you clearly should not be responsible for, the primary focus remains on how much you will pay.

How to know what to pay for and how much to pay

Negotiating the CAMs may turn out to be the easier part of the process. You will want to make sure that you are not paying a disproportionately large amount of the CAMs. In addition, some of these costs can vary widely in cost, and you will want to make sure that you only pay up to a maximum amount. In addition, if you sign a multi-year lease, you will want to make sure these charges only increase a certain amount each year of the lease.

This process could go more smoothly if you enlist the assistance of an Arizona attorney with experience in commercial leases and what is considered normal for the area.

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