Under a triple net lease, tenants are generally required to pay all repair and maintenance costs relating to the common areas of the property it is leasing. In other words, the commercial lease terms will generally provide that the tenant pay the percentage of total common area maintenance (CAM) expenses that its leased square footage bears to the total leasable square footage on the entire commercial property. The total monthly CAM expenses are multiplied by a tenant’s percentage of total leasable square footage to establish the appropriate CAM charge for that tenant.
Disputes between a commercial landlord and a commercial tenant can arise concerning the validity of the CAM charges being passed through to the tenant. A good example, is the case of Pate v. Channel Lumber Co (1997) 51 Cal App 4th 1447. This case relates to one of my favorite vacation spots – Lake Tahoe, California. Here, the commercial tenant who was leasing retail space at the Boatworks Mall in Tahoe City, California sued the owner/landlord of the Boatworks Mall, Channel Lumber Company for breach of contract and misrepresentation. Pate prevailed in the matter and was ultimately awarded damages for improper CAM expenses.