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The Ultimate Guide for Managing Common Area Maintenance Costs as a Tenant

October 7, 2025
Jenny Wakefield

Annual CAM reconciliations can make or break your budget. This guide shows tenants how to review charges, spot errors, and stay ahead of unexpected costs.

For restaurant and retail operators with dozens or hundreds of locations, common area maintenance (CAM) can be one of the trickiest parts of lease management. It’s not just a small side expense: CAM charges can significantly impact your bottom line, introduce budgeting uncertainty, and create headaches if not tracked properly.

This guide is designed to help you understand what CAM is, why it matters, how it’s structured in most leases, and the best practices for staying in control of these costs across multiple locations.

Operators like Serve Hospitality, a Tropical Smoothie Café franchisee, have seen firsthand how careful CAM management can deliver major savings.

“Careful tracking of CAM percentage increases has been key in identifying billing errors. By analyzing yearly changes, we quickly spotted unusual spikes in charges, challenged incorrect bills, and secured refunds from landlords. Additionally, separating controllable and non-controllable CAM gave us a clear view of both categories and made it easy to verify if caps were applied correctly.”

CEO, Serve Hospitality

What Is Common Area Maintenance (CAM)?

Common area maintenance charges are the fees tenants pay to cover the upkeep of spaces shared by all tenants in a property. These are not “optional niceties,” they are contractual obligations outlined in your lease. Typical expenses include:

Exterior upkeep: parking lot repairs, resurfacing, striping, landscaping, snow removal.
Utilities: lighting, water, and electricity for shared spaces.
Services: security, janitorial staff, trash removal.
Administration: property management and administrative fees for overseeing the property.

In a typical triple-net (NNN) lease, tenants pay base rent + CAM + taxes + insurance. That structure shifts nearly all property operating costs onto tenants, making CAM a recurring and sometimes unpredictable burden.

Why CAM Reconciliation Matters for Multi-Location Operators

If you own or operate multiple locations, CAM deserves as much attention as rent. Here’s why:

It’s a Significant Operating Expense
Even small discrepancies in CAM—say, $1,500 per year per store—multiply quickly across a 100-location portfolio, adding up to $150,000 annually.

“At one of our locations, the landlord billed CAM at $4.75 per square foot, even though the lease capped it at $4.30. We identified the discrepancy, presented the analysis, and received a refund. Future billings were corrected to comply with the cap.”

CEO, Serve Hospitality

It’s Complex Across Multiple Leases
Each landlord may define CAM differently. Some use “base year” calculations, some charge flat administrative fees, and others bundle costs creatively. Without systematic tracking, it’s easy to miss overcharges.

It Impacts Budget Predictability
Tenants pay estimated CAM each month, but the true-up reconciliation happens once per year. Large variances can blow up your budget if you haven’t planned for them.

It Ensures Fairness
Without careful review, tenants risk paying for items that aren’t permitted by the lease—such as capital improvements, landlord marketing, or repairs that don’t benefit all tenants.

It’s a Strategic Lever
Tracking CAM across all your locations allows you to benchmark costs, identify outliers, and negotiate stronger terms in renewals and new leases.

Is CAM in Every Lease?

Not always—but in retail and restaurant settings, it’s very common.

Almost always: Shopping centers, strip malls, and multi-tenant properties.
Sometimes: Mixed-use developments or buildings with multiple tenants sharing lobbies or parking.
Not typical: Freestanding stores with no shared areas, or single-tenant net leases (where the tenant is usually responsible for all site expenses directly).

If you’re operating in retail centers, you should assume CAM will appear in most leases.

How CAM Is Billed and Reconciled

Billing: Landlords estimate CAM costs and bill tenants either monthly or quarterly in equal installments. These payments are “on account,” meaning they’re provisional.

Reconciliation: At year-end, the landlord calculates actual CAM expenses for the property. The reconciliation compares actuals to the estimates:

If you underpaid, you owe the difference.
If you overpaid, you get a credit or refund.

Frequency: Almost always annual. While some leases allow semi-annual or quarterly reconciliations, yearly is the standard.

Timing: Usually within 90–120 days after year-end (e.g., reconciliations for 2025 would arrive in early 2026).

Best Practices for CAM Reconciliation

Here’s how multi-location operators keep control:

1. Request Detailed Statements

Don’t accept lump-sum reconciliations. Insist on line-item details—landscaping, snow removal, security, admin fees, etc.

2. Cross-Check with Lease Terms

Verify that charges match what’s allowed in your lease.

Watch for exclusions: capital expenditures, landlord-only benefits, or marketing costs often shouldn’t be passed through.
Confirm any caps on increases (e.g., no more than 5% annually).

“One lease capped annual CAM increases at 3%, but charges rose by 5%. We contested it and secured a refund for the excess.”

CEO, Serve Hospitality

What Is a Cap on CAM Lease Term?

When your lease includes a cap on CAM increases, it means the landlord is limited in how much they can raise CAM charges each year, even if their actual costs rise more.

Example:

Last year’s CAM charges for your store were $10,000.
This year, the landlord’s actual expenses increased by 8% (so CAM should be $10,800).
But your lease has a 5% cap on annual CAM increases.

That means the landlord can only bill you $10,500 (a 5% increase), not the full $10,800. The landlord absorbs the difference.

3. Validate Pro-Rata Share

Ensure you’re only being charged for your fair share of total property expenses, based on your leased square footage relative to the property.

4. Benchmark and Spot Anomalies

Compare this year’s CAM to last year’s. Compare across properties to identify landlords charging significantly more. Pay attention to spikes—like a sudden 40% increase in snow removal or management fees.

“At another location, CAM charges included ‘Roof Replacement Reserves,’ which weren’t allowable under the lease. We flagged it and had those charges removed.”

CEO, Serve Hospitality

5. Track Deadlines

Leases often give you 30–90 days to dispute CAM reconciliations. If you don’t act within that window, you may forfeit your rights.

6. Reconcile Estimates vs. Actuals

Check that all your monthly payments were applied correctly. Ensure overpayments are credited to future rent.

7. Use Audit Rights

Most leases give tenants the right to audit CAM charges. Even if you don’t exercise this annually, notifying landlords that you reserve the right keeps them accountable.

“When discrepancies were identified, we presented detailed per-square-foot analyses backed by lease documentation. Landlords acknowledged the errors, issued refunds, and adjusted future charges to stay compliant.”

CEO, Serve Hospitality

Taking Control of CAM with the Right Tools

Reconciling CAM across one or two stores is manageable. But for operators with 20, 50, or 200+ locations, the manual approach breaks down fast. Different landlords, varying lease terms, strict dispute deadlines, and inconsistent reconciliation statements make it almost impossible to track everything accurately in spreadsheets.

That’s where the right support makes all the difference:

Lease management systems give you a central place to store lease clauses, remind you of reconciliation deadlines, and verify charges against your agreements.
Professional real estate services or tenant rep advisors can audit your CAM reconciliations, benchmark costs, and negotiate with landlords on your behalf. For multi-location operators, this oversight often pays for itself many times over in avoided overcharges.

Conclusion

Managing CAM doesn’t have to be overwhelming. With a proactive process and the right mix of technology and professional support, you can transform CAM from a frustrating unknown into a predictable, controlled part of your occupancy costs.

If you’re ready to simplify CAM reconciliation and gain full visibility across your portfolio, Leasecake can help.

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