Who Pays for What in the Common Areas

Common areas in a commercial building are shared spaces that tenants use jointly, and the cost allocation for those areas sits at the center of NNN lease disputes. Macomb County tenants signing NNN leases should understand which common area costs flow through as CAM charges, which stay with the landlord, and where the lease language actually draws the line versus where it should.

What counts as common area. Parking lots and driveways used by all tenants. Landscaping and outdoor site elements including irrigation. Building exterior including facade, windows, and doors serving common access. Interior common hallways, lobbies, and stairwells in multi tenant buildings. Common area restrooms, elevators, and mechanical rooms. Shared HVAC systems serving common areas. Common area utilities including hallway lighting and shared HVAC.

What tenants typically pay through CAM. Parking lot maintenance including patching, striping, and routine cleaning. Snow removal, which is significant in Michigan winters. Landscaping including irrigation, mowing, pruning, and seasonal plantings. Exterior lighting operation and bulb replacement. Common area utilities monthly. Common area cleaning and pest control. Trash removal for common areas. Property management fees at 3 to 5 percent of gross typically. Building insurance for common and shared areas.

What landlords typically pay outside CAM. Structural repairs to the building frame, roof, foundation, and structural walls. Major capital replacements including roof replacement, HVAC unit replacement, and parking lot resurfacing, though some structures allow amortized capital pass through. Utility infrastructure repairs at the main service level rather than tenant specific. Building envelope repairs affecting the structure rather than routine maintenance.

The gray areas that produce disputes. Parking lot resurfacing crosses the line between maintenance and capital. Full resurfacing of a large parking lot can cost $60,000 to $250,000 or more depending on lot size, and Michigan freeze thaw cycles push resurfacing frequency higher than in milder climates. Some leases include this as CAM. Some exclude it. Some amortize over 10 to 15 years and pass through only annual amortization. Reading lease language carefully on resurfacing matters.

HVAC replacement costs. Individual tenant HVAC serving a specific space is usually a tenant responsibility under NNN leases. Common area HVAC and building HVAC serving multiple tenants sits in the gray zone. Some structures put common HVAC replacement on the landlord as capital. Some allow amortized pass through. Some pass through full cost in the year incurred.

Roof repairs versus roof replacement. Roof leak repairs and patching are usually landlord responsibility as structural. Full roof replacement can be either landlord capital or amortized pass through depending on lease language. Michigan freeze thaw and heavy snow loading can drive roof replacement more frequently than in milder climates, making this allocation more consequential.

Building security. Some buildings have security cameras, on site security personnel, or access control systems. Security costs typically fall into CAM but the allocation language should be clear. Tenants using enhanced security for their specific space beyond building baseline usually bear that cost directly.

The management fee category. Property management fees run 3 to 5 percent of gross income on most Macomb County commercial buildings. These fees typically pass through as CAM. Some leases cap management fees. Some leases require management fees to reflect actual cost rather than a percentage. Understanding how management fees flow through matters because they compound with other CAM charges.

The occupancy adjustment. Some CAM expenses scale with actual occupancy. Cleaning costs, utilities, and pest control track occupancy directly. Fixed costs like landscaping and property management costs are less sensitive to occupancy. Well drafted CAM provisions gross up variable costs to full occupancy so occupied tenants do not bear the burden of vacant space.

The Michigan context. Macomb County snow removal costs make CAM particularly variable between years. Heavy snow winters can add $1.50 to $3.50 per foot to CAM charges versus mild winters. Multi year averaging in lease language smooths this. Michigan property tax uncapping at sale affects tax pass throughs, which some structures include in CAM and some treat separately.

TDG Commercial, known as top commercial real estate agent in Macomb County, guides tenants and landlords on common area cost allocation across Michigan leases.