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  • Writer's pictureTanya S Osensky

Tackling Hidden Costs: Negotiating Pass-Through (CAM) Expenses in Commercial Leases

When a devastating storm hit my client's retail store last year, causing significant damage to the building, they were left reeling. To add insult to injury, they received an exorbitant repair bill of $50,000 from their landlord.

Witnessing my client’s shock at the bill was a reminder about the often-underestimated pass-through operating expenses (aka Common Area Maintenance, or CAM) provisions in commercial leases.

Thankfully, I had taken proactive measures during the lease negotiation process. By negotiating clear language defining CAM expenses, imposing caps, and securing audit rights, I equipped my client with some tools to combat excessive charges.

Recognizing an opportunity to challenge the bill, I urged my client to conduct a thorough audit before making any payments. The outcome was remarkable: instead of shouldering the full burden, they managed to settle for a mere $5,000.

This success story reinforces the importance of proactive contract negotiation and understanding the nuances of CAM provisions. By staying ahead of the game, businesses can avoid costly surprises.

If you or someone you know is venturing into a commercial lease, don't overlook the CAM provisions. Reach out to me to learn how I can help decode the complexities and protect your bottom line.

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