A CAM charge is an additional rent, charged on top of base rent, and is mainly composed of maintenance fees for work performed on the common area of a property Each tenant pays their pro rata share of a property's total CAM charges, which prorated share is the percentage of the tenant's rented square footage of the total, rentable square footage of the property.
Generally, landlords want CAM charges defined so broadly that they can pass through a majority of their operating expenses to tenants.
The tenant generally wants CAM charges defined narrowly in hopes that the landlord pays a majority of the operating costs.
Uncontrollable CAM charges are taxes, security costs, utilities, and snow removal expenses.
[2] CAM charges are subject to wide variations, as tenants move in and out and various inflationary items occur.
To address this, some leases include "cap" and "floor" terms, which limit these changes to fixed values on a year-over-year basis.
Year-over-year caps mean the percentage increase applies not to a base amount, but to the actual CAM charge of the previous year.