If you are already paying CAM fees as a tenant, beware of any added fees for operational or management costs. These fees might be labeled as “Administrative Fees,” and are a landlord’s way of trying to get a tenant to contribute to his or her own costs. These administrative fees are typically based on a percent of total CAM costs. As a tenant, you will want to object to such costs, or at least see evidence of how your share of these fees has been calculated. Most tenants object to O&M fees because the landlord already makes a profit off of the rent tenants pay, even without the CAM fees. Here are some tips for dealing with these extra fees in a lease:
- If your CAM fee includes O&M fees that go towards liability insurance costs, the salaries for administrators or management (on or off-site), advertising, or professional services (i.e. legal or accounting), you should try to negotiate these specifically out of our lease.
- Savvy negotiating tenants will try to reduce the percentage of these fees (which can range from 5% to 25%) and eliminate costs that are not related to maintenance (i.e. utilities, insurance, taxes).
- You could try to argue that repair and maintenance costs related to buildings (i.e. roofs, foundations, exterior walls) are not your responsibility because they are not common areas used by you and your customers.
You might not be able to eliminate these fees entirely, but be aware that they might be in your lease and you might be able to at least negotiate their reduction.