What Is Included in Common Area Maintenance?

A Spring Reconciliation Guide for Office Tenants

Spring brings more than warmer weather for commercial office tenants. It is also the time of year when landlords distribute annual reconciliation statements for operating expenses and common area maintenance (CAM). These documents compare the estimated costs tenants paid throughout the prior year against actual expenses incurred, and the financial impact can be significant. For tenants who do not fully understand what CAM includes or how to verify these charges, spring can mean unexpected bills amounting to thousands of dollars.

Understanding what is included in common area maintenance is the first step toward protecting your business from overpaying.

What Is Common Area Maintenance?

Common Area Maintenance (CAM) refers to the costs of maintaining and operating shared spaces in a commercial building that benefit all tenants. These areas include lobbies, hallways, elevators, stairwells, public restrooms, parking lots, and landscaped grounds, spaces that no single tenant leases individually but every tenant uses.

CAM is a subcategory of the broader term operating expenses (OPEX), which also encompasses property taxes and building insurance. While all three components contribute to a tenant’s total occupancy cost, CAM specifically addresses the upkeep of common areas. CAM charges are calculated on a pro rata basis, meaning each tenant pays a proportionate share based on the square footage they occupy relative to the building’s total rentable area.

For a full breakdown of lease structures, see our guide on demystifying operating expenses.

What Is Typically Included in CAM Charges?

The specific items included in CAM charges vary by lease, which is why reviewing the language in your agreement is critical.

Most commercial office leases include the following categories.

• Management and Administrative Fees -Property management companies charge fees for coordinating building operations, vendor relationships, and day-to-day maintenance. Administrative costs such as accounting and reporting expenses are also commonly included. Management fees are often calculated as a percentage of gross rents collected, making them worth scrutinizing during negotiations.
• Contract Services – Landlords contract with outside vendors for janitorial and cleaning services, security personnel and surveillance, trash removal, and elevator maintenance. These ongoing service contracts represent a significant portion of annual CAM costs and are considered controllable expenses, meaning they are often negotiable.
• Maintenance and Repairs – Routine upkeep of shared interior spaces includes maintenance and repairs for hallways, lobbies, elevators, public restrooms, stairwells, and HVAC systems serving common areas. General painting, plumbing, and electrical work in shared spaces are also typically passed through as CAM charges.
• Parking and Exterior Upkeep – Parking lot maintenance is often one of the largest CAM line items, covering paving, cleaning, striping, surface treatments, and lighting. Landscaping, irrigation, sidewalk maintenance, and exterior lighting for the building grounds are also included.
• Utilities for Common Areas – Electricity, water, gas, and sewer costs for non-leased spaces are frequently included. In some buildings, electricity is metered across the entire property and allocated through CAM rather than billed individually to tenants.

CAM vs. Operating Expenses: Understanding the Distinction

Operating expenses are the umbrella category encompassing property taxes, building insurance, and CAM. While taxes and insurance are generally set by external entities and less negotiable, CAM line items are often more flexible, especially when the lease clearly defines what can and cannot be passed through. This means you may have more leverage to negotiate CAM provisions than you realize.

For a seasonal breakdown of how these costs work, read our article on operating expense pass-throughs.

The Spring Reconciliation Statement

Each year, typically in March, landlords issue reconciliation statements comparing the estimated operating expenses collected monthly against actual costs incurred. If actual costs exceeded estimates, the tenant owes the difference. If the landlord overestimated, the tenant may receive a credit. Alongside the reconciliation, new estimates for the current year are issued, often including catch-up payments for months already elapsed.

This is the moment when many tenants discover billing errors, inflated charges, or line items that should never have been included. A single miscalculation in the base year can compound over the life of the lease and cost thousands of dollars.

How to Protect Yourself as a Tenant

Receiving a reconciliation statement does not mean you are obligated to accept every charge without question. There are several steps every commercial tenant should take.

• Review your base year carefully. The base year establishes the benchmark against which all future increases are measured. If it was calculated incorrectly, every subsequent charge will be inflated.
• Exercise your audit rights. Most leases provide a 30 to 60 day window to review the landlord’s books after receiving a reconciliation statement. If your lease lacks audit rights, prioritize this in your next renewal.
• Request historical expense data. Compare current charges against prior years to identify unusual spikes or new line items not previously included.
• Negotiate CAM caps and exclusions. Push for caps on controllable expenses and exclude capital expenditures, landlord negligence costs, and vacant space expenses. Visit our lease negotiation checklist for CFOs for a comprehensive list of items to negotiate.
• Engage professional support. A tenant representative or lease administration specialist can identify overcharges that tenants without industry expertise are likely to miss.

Why Tenant Representation Matters

Landlords employ sophisticated accounting teams and professional negotiators to maximize revenue. Tenants deserve equally skilled representation. At Mazirow Commercial, we exclusively represent tenants, never landlords, ensuring our advice is always 100% conflict-free.

Our lease administration services provide ongoing monitoring to catch billing errors, verify charges, and ensure you never overpay on rent, operating expenses, CAM fees, or parking.

Our documented client outcomes include $80,000 saved on parking costs, $75,000 saved through rental rate negotiations, $50,000 per year saved on after-hours HVAC costs, and $375,000 recovered through tenant improvement allowance conversions.

Learn more about our tenant representation services.

Take Action This Spring

If a reconciliation statement has arrived or is on its way, do not pay a bill you have not verified. Schedule a free consultation with Mazirow Commercial to have your statement and lease reviewed by a tenant-only advocate with over 30 years of experience protecting businesses across Southern California’s 101 Corridor, from Los Angeles through the San Fernando Valley, Conejo Valley, Ventura County, and Santa Barbara County.

Your landlord has a team working for them. Shouldn’t you?