Who said I should pay for a new heating and cooling unit?

Who said I should pay for a new heating and cooling unit?


In the spring of 2015, I got a 22% increase in my common area maintenance (CAM) pass-through expense. CAM charges are billed pro rata to me and other tenants, based on our percentage of total property square footage and to cover the cost of common area upkeep.

When I sent an email to the property management office asking for clarification, I was told they would get back with me. Several emails later, they finally sent me the itemized breakdown of expenses. As I scanned through the breakdown, I noticed a big spike in the maintenance and repair section of the expenses.

I called the office and asked if they had installed a new heating and cooling system. Their response? “Why yes we have, why did you ask?”

I pointed out to the lady I spoke with that she needed to read the paragraph in the lease that defined what was an acceptable pass-through expense. It specified that a new HVAC system was a capital expense and that capital expense charges that were allowed to be billed to tenants via CAM were limited to the depreciation amount for the useful life of the asset.

By the time we completed the review of depreciation allocation, my CAM charges increased by only 3%.

Perhaps you could use some help with reviewing your CAM charges.  If so send us your name, phone number and email address and we will call you to set up an appointment.

About the Author

Lynn Drake’s status is well known in the industry: She’s the commercial realtor focused on maintaining “true north” for her corporate clients. It’s a reputation built on 35 years of commercial real estate experience. Lynn became a commercial realtor in 2001 after 15 years in corporate real estate. Thus far in her career, Lynn has successfully completed over 1,500 real estate transactions ranging from small business tenant leases to the sale and purchase of industrial complexes.