Common Area Maintenance Charges Information
CAM charges typically include: landscaping and grounds maintenance, parking lot and sidewalk maintenance (sweeping, striping, and repair), exterior lighting, security and surveillance, common area utilities (water, electricity, and gas for common areas), snow and storm cleanup (in Florida: hurricane debris removal and flooding remediation), roof repairs and maintenance, building exterior maintenance, common area HVAC, and management fees (a percentage of gross revenue or a fixed fee for administering the property). CAM charges do NOT typically include: capital improvements (new construction, major renovations, and structural repairs), landlord's general overhead (administrative costs not directly related to the property), marketing and promotional expenses (unless specifically included in the lease), and costs that benefit only specific tenants.
Florida Legal Definition
CAM charges in Florida commercial leases are governed by: the lease terms and Florida commercial lease law. Under Florida Statutes §212.031, CAM charges passed through to tenants are subject to the commercial rent tax at 5.5% (CAM charges are considered part of the total rent for sales tax purposes). Under Florida contract law: the CAM charge provisions in the lease are enforceable as written, the landlord must comply with the lease's accounting and reconciliation provisions, and the tenant has the right to challenge improper CAM charges (through the dispute resolution process specified in the lease). Under Florida practice: most commercial leases use a base year or a base stop (the landlord pays CAM charges up to a base amount; the tenant pays their proportionate share of increases above the base).
How It's Used in Practice
In practice, attorneys negotiate and manage CAM charge provisions in commercial leases. For tenants, the attorney: negotiates a clear definition of included and excluded expenses (specifying which expenses may be passed through and which are the landlord's responsibility), negotiates caps on annual CAM increases (limiting annual increases to 3-5%), negotiates audit rights (the tenant's right to review the landlord's books and records to verify the CAM charges), evaluates the proportionate share calculation (ensuring the tenant's share is fairly calculated based on the actual leasable area), and reviews the annual CAM reconciliation statement (comparing the actual charges to the budgeted amounts). For landlords, the attorney: drafts comprehensive CAM provisions (covering all legitimate operating expenses), prepares the annual CAM budget and reconciliation, responds to tenant audit requests, and addresses disputes about CAM charges. The attorney advises: the commercial rent tax on CAM charges adds 5.5% to the tenant's total occupancy cost; this must be factored into the tenant's financial analysis.
Key Takeaways
- CAM charges: tenant's share of common area operating expenses.
- Florida sales tax (5.5%) applies to CAM pass-throughs.
- Negotiate: included/excluded expenses, caps, and audit rights.
- Annual reconciliation: compare actual expenses to budget.
- Proportionate share based on leased area vs. total leasable area.
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Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC