One of the most common questions commercial tenants ask is: "What exactly am I paying for?" When you receive a CAM reconciliation statement with dozens of line items, it can be difficult to determine which charges are legitimate pass-throughs and which may not be authorized under your lease. The answer depends almost entirely on the specific language in your lease agreement — but there are general categories that most commercial leases follow.
Expenses Typically Included in CAM
Most commercial leases allow landlords to pass through the costs of maintaining and operating common areas — the shared spaces that benefit all tenants. These typically include:
Grounds and Exterior Maintenance
- Landscaping, irrigation, and tree maintenance
- Parking lot sweeping, restriping, and minor repairs
- Sidewalk maintenance and pressure washing
- Snow and ice removal
- Exterior lighting maintenance and electricity
- Signage maintenance for common area directional signs
Building Systems and Repairs
- HVAC maintenance and repair for shared systems
- Plumbing repairs in common areas
- Elevator and escalator maintenance
- Fire safety and sprinkler system maintenance
- Roof repairs (not replacement — see capital expenses below)
- General building repairs and maintenance
Services
- Janitorial services for lobbies, hallways, and restrooms
- Trash collection and recycling
- Security personnel or patrol services
- Pest control
- Window cleaning for common areas
Utilities and Insurance
- Common area electricity, water, and gas
- Property insurance premiums
- General liability insurance for common areas
Administrative Costs
- Property management fees — usually calculated as a percentage (3% to 8%) of total operating expenses. Verify that your lease specifies the percentage and that the reconciliation statement applies it correctly.
- Property tax (in NNN leases)
Expenses Typically Excluded from CAM
Well-drafted commercial leases include an exclusion list — specific categories that the landlord cannot pass through to tenants. Even if your lease doesn't explicitly list every exclusion, certain costs are widely understood to be the landlord's responsibility:
Capital Expenditures
Major improvements that extend the life of the property or add value — such as a new roof, parking lot replacement, or building facade renovation — are generally not passable as CAM charges. Some leases allow capital expenses to be amortized over their useful life, but they should never be charged in full during a single year. For more on this topic, see our article on whether landlords can charge capital expenses to tenants.
Landlord's Own Costs
- Mortgage payments, debt service, or refinancing costs
- Ground rent payments
- Depreciation on the building or its systems
- Income taxes owed by the landlord
- Costs of maintaining the landlord's own office space
Leasing and Tenant-Related Costs
- Leasing commissions and brokerage fees
- Tenant improvement or build-out costs
- Marketing, advertising, or promotional expenses for the property
- Legal fees for lease negotiations or tenant disputes
- Costs of negotiating or enforcing other tenants' leases
Reimbursed or Covered Costs
- Costs covered by insurance proceeds or settlements
- Expenses covered under contractor or manufacturer warranties
- Costs for which the landlord receives a refund, rebate, or credit
Corrections and Penalties
- Fines or penalties imposed on the landlord for code violations
- Costs of correcting construction defects
- Environmental remediation costs (unless caused by the tenant)
The Gray Areas
Many CAM disputes arise from expenses that fall somewhere between clearly included and clearly excluded. These gray areas are where careful lease language matters most:
- Repair vs. replacement: Patching a section of the parking lot is typically a CAM expense. Repaving the entire lot is a capital expenditure. But where exactly does "repair" end and "replacement" begin? This is one of the most common sources of CAM overcharges.
- Above-standard services: If the landlord upgrades landscaping or adds premium amenities, should the increased cost be part of CAM?
- Shared vs. exclusive expenses: If an expense benefits only certain tenants (like a loading dock used by one tenant), should it be allocated to all tenants?
- Technology and upgrades: New security cameras, building automation systems, or energy-efficient upgrades may fall into a gray area depending on your lease language.
How to Verify What Your Lease Permits
The best way to verify your charges is to read the operating expense and CAM sections of your lease carefully. Here is what to look for:
- Find the expense definition. Look for the section that defines "Operating Expenses," "Common Area Maintenance," or "Additional Rent." This section lists what the landlord can include.
- Find the exclusion list. Most leases include a separate section listing specific exclusions. Cross-reference this list against your reconciliation line items.
- Check for caps. If your lease includes a CAM cap, verify that controllable expenses are not exceeding the permitted annual increase.
- Request invoices for questionable charges. If a line item doesn't clearly fall within the permitted expenses, ask the landlord for the underlying invoices and a written explanation of how the charge qualifies under your lease.
How LeaseGuard Helps
LeaseGuard automates the comparison between your lease language and your reconciliation statement. The platform reads both documents and flags charges that may not be authorized — including expenses that appear on your lease's exclusion list, capital expenditures classified as operating costs, management fee miscalculations, and CAM cap violations. This analysis is delivered in about 60 seconds, giving you a clear picture of which charges warrant further investigation.
Key Takeaways
- What landlords can include in CAM is defined by your specific lease — not by general practice
- Most leases include both an inclusion list and an exclusion list — review both carefully
- Gray areas around repairs vs. replacements and above-standard services are the most common source of disputes
- Always cross-reference reconciliation line items against your lease language
- Request supporting invoices for any charge you cannot clearly match to a permitted expense category