Structuring Common Area Maintenance Provisions in Commercial Leases

Exploring Alternative Methods of Managing CAM Operating Costs

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, March 26, 2015

Recorded event now available

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Program Materials

This CLE will provide real property counsel with a detailed explanation of common area cost provisions in commercial leases. The panel will outline which costs are standard inclusions and what can and should be excluded. The panel will offer alternative methods of managing CAM costs such as capped CAM costs, fixed CAM costs, and gross leases. 

Description

Common area costs are intended to cover landlords’ cost of maintaining the property. This has evolved as savvy tenants seek to exclude certain costs, such as capital expenses, and savvy landlords seek to make a profit through these charges through management and administrative fees.

Counsel must understand available options when negotiating these provisions to ensure that your client is not surprised by additional charges they may incur and charges for which tenant reimbursement to the landlord is not specified.

Listen as our authoritative panel of real estate practitioners provides insights from the landlord and tenant perspectives regarding options for CAM provisions based on the type of property, the type of tenant, and the type of lease. The panel will consider the different options for parties to manage and control a budget, including caps on CAM costs, whether cumulative or not, controllable and uncontrollable CAM costs, fixed CAM costs, and rights to audit CAM charges.

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Outline

  1. Standard common area cost inclusions and exclusions
  2. Alternate common area cost options
    1. CAM cost caps
    2. Fixed CAM costs
  3. Audit rights of common area costs

Benefits

 The panel will review these and other key issues:

  • What should the minimum maintenance standard be for a landlord?
  • Should capital costs, holiday decorations, management fees and administrative fees be part of CAM costs?
  • What considerations should be taken into account when drafting a cap on CAM costs?
  • What are reasonable audit rights for CAM costs?

Faculty

Dionne, Gideon
Gideon Dionne
Founding Partner
inVigor Law Group

Mr. Dionne's primary practice areas are business contracts, business formation, structuring, financing, and...  |  Read More

Bryan Mashian
Bryan Mashian
Founder
Law Offices of Bryan Mashian

Mr. Mashian's practice focuses on complex commercial and real estate law. Prior to founding his own firm,...  |  Read More

Stockton, Tracey
Tracey M. Stockton
Partner
Sherin & Lodgen

Ms. Stockton has a broad and deep transactional practice which includes significant experience in commercial real...  |  Read More

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