Understanding Your Lease – Common CAM Exclusions

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.

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