What is a Common Area Maintenance Cap?
Common area maintenance (CAM) cap is a term used in commercial real estate to refer to the maximum amount that a tenant is responsible for paying in common area maintenance fees. Common area maintenance fees are charges that are levied by the landlord to cover the cost of maintaining and operating shared spaces within a building or shopping center, such as hallways, lobbies, restrooms, and outdoor spaces.
The CAM cap is typically included in the tenant's lease agreement and is based on the tenant's pro rata share of the common areas within the building or shopping center. For example, if a tenant occupies 10% of the total square footage of a building, they would be responsible for paying 10% of the common area maintenance fees.
The CAM cap is an important consideration for commercial tenants, as it can affect the overall cost of occupying a space. It is also an important consideration for landlords, as it can help to ensure that common area maintenance fees are fairly allocated among tenants.
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