Common CAM expense exclusions include:
- Initial cost of the land or the construction of the original buildings, parking and other improvements;
- Mortgage principal, interest and related expenses;
- Refinancing costs;
- Ground rent and related costs;
- Depreciation and amortization of property and equipment;
- Cost of complying with government regulations including compliance with environmental laws;
- Costs, fines or penalties incurred by landlord for violation of government regulations and costs for correcting code violations or defects;
- Interest or penalties from landlord’s late payments;
- Advertising, renovation, improvements and other costs associated with seeking and obtaining new tenants and retaining existing tenants;
- Brokerage commissions;
- Tenant alterations and alterations made to leasable space;
- Capital expenditures;
- Costs reimbursed by other tenants;
- Costs reimbursed by insurance and/or warranties;
- Costs reimbursed by government agencies;
- Special services for specific tenants;
- Legal services relating to leases with other tenants or with the transfer, sale or disposition of land or buildings located on the property;
- Off site management personnel and overhead;
- Operation of services or amenities for which landlord charges a fee to third parties;
- Costs associated with remedying construction defects;
- Utility costs directly payable by tenants or other occupants;
- Salaries and benefits of landlord’s executive officers;
- Excessive costs for sculpture, paintings and other fine art;
This is not an exhaustive list of exclusions. See Understanding Your Lease – Common Area Expenses for a summary of important common area expense considerations.