When it comes to property management, understanding CAM (Common Area Maintenance) charges is essential for both property owners and tenants. These charges represent a specific type of operational cost that plays a crucial role in maintaining and enhancing the shared spaces within a property, especially in commercial settings. In San Antonio, as businesses and property investments continue to grow, knowledge of CAM charges can help owners and tenants alike make informed financial decisions, fostering better relationships and ensuring property values are sustained.
In this blog, we’ll break down what CAM charges are, how they’re calculated, what they cover, and why they matter in the world of property management.

What is CAM?

CAM, or Common Area Maintenance, refers to the fees paid by tenants to cover the costs of maintaining and operating the common areas within a property. Common areas are the parts of a building or property that are accessible and used by all tenants, such as lobbies, hallways, parking lots, landscaping, and elevators. These areas are essential to the appeal, functionality, and safety of a property and are, therefore, maintained to ensure a quality experience for everyone on the premises.

For property owners, CAM charges help to offset the expenses associated with these shared spaces, enabling them to maintain high standards without bearing the full financial burden. For tenants, CAM charges support the upkeep of spaces that contribute to their business’s image and operations, such as clean parking lots, well-lit hallways, and manicured landscaping that enhance customer appeal.

What Do CAM Charges Cover?

CAM charges can vary based on the property type, lease structure, and specific amenities provided. However, common items typically covered by CAM charges include:

Maintenance and Repairs: Routine cleaning, repair, and maintenance of common areas such as parking lots, walkways, lobbies, and restrooms fall under CAM. This includes services like snow removal, landscaping, cleaning, and elevator maintenance.
Utilities for Shared Spaces: Lighting, water, and HVAC for common areas are often included in CAM fees. Tenants benefit from well-lit and climate-controlled spaces without having to worry about separate utility accounts for these areas.
Security and Safety: Security guards, surveillance systems, fire alarms, and sprinklers are necessary for tenant safety and can be included in CAM charges. Ensuring a secure environment enhances the overall appeal and functionality of a property.
Property Management Fees: Fees for professional property management services, which handle the day-to-day operations of the property, are also often a part of CAM. Property managers coordinate vendors, oversee maintenance, and ensure that the property remains compliant with regulations.
Insurance and Property Taxes: In some cases, a portion of the property’s insurance and taxes may be included in CAM, though this is not always the case. These costs can sometimes be structured as separate items in a lease agreement.
CAM fees can be classified as either controllable or uncontrollable costs. Controllable costs are expenses that property management can influence, such as janitorial services or landscaping. Uncontrollable costs, on the other hand, include property taxes and insurance premiums that are largely dictated by external factors. Knowing the distinction between these costs can be helpful for tenants, as it informs them about where expenses may fluctuate over time.

How Are CAM Charges Calculated?

CAM charges are typically calculated based on the pro-rata share of each tenant’s space in relation to the entire property. For example, if a tenant occupies 10% of the building’s leasable area, they would generally pay 10% of the CAM charges.
The calculation of CAM fees can vary depending on the lease type and specific terms outlined in the lease agreement. Here are two common methods:

Fixed CAM Charges: Some leases specify a fixed amount for CAM charges, providing tenants with a predictable monthly fee. However, the property owner may still adjust the CAM charges periodically to reflect inflation or increases in operating costs.
Variable CAM Charges: In other leases, CAM charges may be calculated based on actual expenses incurred. At the end of each year, the property owner calculates the total common area costs and bills tenants accordingly. This is sometimes called a “reconciliation,” where tenants receive either a bill for any shortfall or a credit for overpayments.

Caps on CAM Charges: To protect tenants from excessive increases, some leases include a cap on the amount by which CAM fees can increase annually. This cap helps tenants plan for their expenses more reliably while still allowing property owners to cover necessary costs.
CAM Reconciliation: Why It Matters
At the end of each year, property managers conduct a CAM reconciliation to balance the actual expenses against the amounts collected from tenants throughout the year. During this process:
If the actual expenses were lower than anticipated, tenants might receive a credit or refund.
If the expenses exceeded the estimated amount, tenants may be required to pay the difference.
CAM reconciliation ensures fairness and transparency, providing tenants with a detailed report of how CAM fees were allocated and spent. For property owners, it helps in maintaining accurate records and transparent communication with tenants, strengthening trust and collaboration.

Benefits of CAM Charges in Property Management

For Property Owners
Consistent Revenue for Maintenance: CAM charges provide a steady stream of revenue dedicated to property upkeep. This helps owners maintain property standards without sacrificing profitability.
Enhanced Property Appeal: CAM-funded maintenance ensures that shared spaces are attractive, well-kept, and inviting, boosting the property’s appeal and competitive edge.
Increased Property Value: Regular maintenance and quality management can help increase or preserve a property’s value, attracting more quality tenants over time.
For Tenants
Access to Quality Amenities: By contributing to CAM, tenants enjoy well-maintained common areas that enhance their customer’s experience and their employees’ working environment.
Predictable Maintenance Costs: CAM charges make it easier for tenants to budget for maintenance costs, especially with fixed or capped fees.
Professional Property Management: Property management fees covered by CAM charges ensure that professional managers are available to address issues and handle daily operations.
Common Area Maintenance (CAM) charges are an integral part of commercial property management, providing both property owners and tenants with a fair and systematic way to maintain shared spaces. They help to ensure that common areas remain safe, functional, and attractive, benefiting all who use them.

At Pyramis, we strive to make CAM charges transparent and manageable, helping property owners and tenants in San Antonio achieve mutually beneficial leasing arrangements. With our expertise in commercial property management, we work to ensure a fair and professional approach to CAM, making property management as smooth and transparent as possible for everyone involved.