In many commercial leases, tenants are responsible for both rent and a share of the property expenses. Common area maintenance (CAM) fees are one of these expenses. CAM fees help cover the landlord’s direct expenses for maintaining areas shared by all tenants.
Because CAM expenses vary depending on the real charges accrued, reconciling estimated CAM charges with actual charges can be time consuming. Automating CAMs with Yardi Breeze is one easy way commercial property managers can save themselves a significant chunk of time.
CAMs can include the cost of maintaining both internal and external spaces. Internal common areas may include elevators, public restrooms, hallways, lobbies and more. Outdoor common areas often include parking lots, landscaped spaces and signage.
Clearly stating what CAM fees cover in your lease can help you avoid questions and possible conflict with tenants later. CAM fees are usually allocated to tenants on a pro rata basis, meaning the more square footage a tenant rents, the greater their percentage of CAM expenses.
How does it work?
Tenants pay a monthly estimate charge for the property expenses. The actual expenses are tracked in recoverable expense accounts throughout the year. Then, at the end of the year, a reconciliation is done.
- The tenant’s share of the actual expenses is calculated.
- The tenant’s share is compared to the estimated charges the tenant has paid.
- If the expenses are greater, an additional charge is created for the tenant. If the estimates are greater, the tenant gets a credit.
Saving time with CAM reconciliation in Yardi Breeze
Of course, manually tabulating a year’s worth of expenses and comparing it to estimates for each tenant can be a time-consuming process, especially if you have many shared spaces or multiple properties. Fortunately, Yardi Breeze automates CAM reconciliations and calculates commercial recoveries for you.
In Yardi Breeze, CAM recs are as easy as 1-2-3:
- Designate a property as commercial and set up its tenants accordingly.
- When you create payables for CAM-related property expenses, code them to accounts that are designated as recoverable accounts.
- Run a reconciliation report at the end of the year to create the balancing charges/credits to the tenants.
When you’re finished, Yardi Breeze can automatically generate a reconciliation letter for each tenant. The reconciliation letter will show the balance due or owed and the reconciliation calculation detail for the year. You can even email the statement to the tenant.
And ta-da, you just saved yourself a ton of time, trouble and paper!
What else can Yardi Breeze do for commercial?
Our commercial functionality is designed to streamline your operations, from CAM reconciliations to percentage rents. If you have specific questions about our commercial tools, use the chat window below to get answers from a real person (not a bot).