What are common area maintenance charges and how are they calculated in an Ontario commercial lease?

Common area maintenance charges, often called CAM charges, are a tenant's share of the landlord's costs to operate and maintain the shared parts of a commercial property — things like parking lots, hallways, lobbies, landscaping, snow removal, exterior lighting, and the property management fee itself. They're typically charged as part of "additional rent" on top of base rent, calculated based on the tenant's proportionate share of the building or plaza's total leasable area.

Landlords generally estimate CAM charges at the start of each year and bill tenants monthly based on that estimate, then reconcile against the landlord's actual costs at year end, with tenants either owing a top-up or receiving a credit depending on how the estimate compared to reality. Because this reconciliation process gives the landlord real influence over the final number, tenants should pay attention to what costs are included, and whether the lease gives the tenant any right to review supporting documentation or challenge the calculation.

Negotiating a cap on annual CAM increases, or excluding certain costs like capital repairs and major capital replacements from the tenant's share, are common ways tenants manage this exposure. Reviewing the CAM definition closely before signing is worth the effort, since it's one of the more variable costs in a commercial lease.