What is a Shared Common Area in Rental Property? What are Cam Charges?


Steve Freeman: I’m sitting with Steve Katkov of JUX. Let’s talk a little bit about what a common area is. What—How would I know that it’s a common area that I need to be responsible for in my other expenses?

Steve Katkov: I find the easiest way, Steve, is to think about common area as shared use space. So to the extent that all tenants or any one tenant has the right to use or exclude others from an area, will define what is shared use. The typical example is a small strip mall that has 3 or 4 tenants. And on the back side of the building is a common hallway leading to 2 bathrooms, possibly 3: a unisex or family bathroom, a men’s bathroom, a women’s bathroom, maybe a janitorial closet. That back hallway would be common area. All 4 of the tenants, or 3 of the tenants, have the right to use it. Their customers have the right to make use of the bathrooms.

Steve Freeman: And that term common area maintenance, we often hear those being described as cam charges.

Steve Katkov: Cam charges, right. And again important—Particularly if you’re tying yourself to a long term relationship with the landlord, and by that I mean certainly more than 24 months, that you be very clear what cam includes because it varies from state to state, even sometimes from city to city on what the business culture considers common area maintenance. And we see, definitely, national differences. And in part, it stems from the fact that our climate can vary so greatly in the United States that if your leasing experience is in South Florida, the business practice there, the customary understandings, are going to be different than they are in International Falls, Minnesota. And some landlords consider real property taxes as a component of common area maintenance. And some do not.