Renting commercial space provides flexibility for business leaders. If a company fails or grows more rapidly than they expect, they can move on to a new location when the lease ends.
They can also rely on the landlord to provide certain amenities, as well as maintenance support at the property in many cases. If a business takes possession of one unit in a multi-unit facility, such as a retail mall or an office building, the landlord may manage the parking lot, security and bathrooms for everyone. They may charge common area maintenance (CAM) fees to cover those operational expenses.
Commercial tenants may need support evaluating and negotiating CAM charges to ensure a fair arrangement, and that’s okay.
Use should affect obligations
Frequently, landlords use a simple square footage formula to assign each tenant a certain percentage of their total CAM expenses. However, there is an opportunity to negotiate before signing the lease. Square footage does not necessarily correlate to wear and tear on facilities, parking demand or even the use of utilities.
If a business model is likely to generate less damage to the space or to use shared services, such as security and parking infrastructure, less frequently than other tenants in the same building, it may be possible to have a landlord reduce the percentage of responsibility assigned. It may also be possible to negotiate an agreement where the tenant pays a flat amount in CAM charges every month instead of fluctuating amounts depending on the costs the landlord incurs that month.
Negotiating commercial leases can be challenging, even for seasoned business leaders. A lawyer’s support can help executives and owners evaluate commercial leases and secure the best terms possible.
