Are CAM exclusions standard in commercial leases?

No. There is no standards body defining what may or may not be included in operating expenses. BOMA’s ANSI/BOMA Z65 standards govern floor measurement, not chargeable costs. Certain exclusions recur often enough in executed leases to be treated as conventional, particularly capital improvements, debt service and other tenants’ improvement costs, but a landlord’s standard form usually contains fewer exclusions than a negotiated lease.

Can a landlord pass through capital expenditures as CAM?

It depends entirely on the lease. Without an exclusion, capital costs can be charged in the year incurred. Most negotiated leases either exclude capital items or permit them amortized over the useful life of the asset, often with an exception for improvements intended to reduce operating costs. Check whether your lease names the amortization period and the interest rate.

What is the difference between a CAM exclusion and a CAM cap?

An exclusion removes a category of cost from the pool entirely. A cap limits how much the total, or a defined subset, can increase in a period. They solve different problems and you generally want both.

Do CAM exclusions survive a sale of the building?

Only if the lease says so. Make exclusions expressly binding on successors and assigns. Without that, a new owner may take the position that its own operating expense practice governs.

Is it worth negotiating exclusions for a small location?

Judge it across the portfolio rather than by the site. Exclusion language usually propagates through a standard form used at every location, so winning a capital expenditure carve-out once and carrying it into your template is worth considerably more than the site that prompted it.

Published: September 14, 2026

Last updated: September 14, 2026

CAM reconciliation

Which CAM exclusions to negotiate into the lease

No standards body defines what CAM can include. Every exclusion you get is one you negotiated into the lease before you signed it.

Emma Sukenik9 min read

CAM reconciliation — Which CAM exclusions to negotiate into the lease

CAM exclusions are the categories of cost a commercial lease prohibits the landlord from including in common area maintenance charges. They are contractual, not standard. Whatever your lease excludes is what someone negotiated into it, and whatever it does not exclude is generally billable, however unreasonable it looks on the reconciliation two years later.

That is the whole argument for treating this at the negotiation table rather than the audit. By the time a charge appears on a reconciliation statement, your position is fixed by language written years earlier. For the audit side once the statement arrives, see how to audit common area maintenance charges.

Why there is no standard list of CAM exclusions

Tenants often assume an industry standard governs what belongs in CAM. None does. BOMA International publishes the recognized measurement standards for commercial space, the ANSI/BOMA Z65 series covering office, industrial, gross areas, multi-unit residential, retail, and mixed-use. Those standards define how floor area is measured, which matters enormously for your pro-rata share. They do not define what may be charged as an operating expense.

The practical consequence: there is no external authority to appeal to. You cannot argue that a charge is improper because the industry says so. You can only argue it is improper because your lease says so.

The exclusions that recur in executed leases

Reviewing operating cost exclusion clauses across executed commercial leases, the same categories appear repeatedly.

Exclusion	What it stops
Capital improvements	Major replacements charged in the year incurred
Tenant improvements and leasing costs	You funding another tenant’s buildout
Debt service and ground rent	Financing costs recast as operations
Insured or condemned losses	Paying twice for the same damage
Separately contracted utilities	Subsidizing another tenant’s direct service
Hazardous materials remediation	Inheriting an environmental liability
Selectively provided services	Paying for service you do not receive

Beyond those, a longer list is commonly sought and less consistently granted: landlord income and franchise taxes, leasing commissions, marketing spend above a stated cap, executive compensation above the on-site manager, management fees above a negotiated percentage, above-market affiliate charges, fines from the landlord’s own violations, and correcting original construction defects. Treat these as negotiating positions rather than expectations.

Capital expenditure is where the money is

If you win one exclusion, win this one, and win it with the amortization language attached. Without an exclusion, a roof replacement or a chiller swap can land in the CAM pool in the year incurred, and your pro-rata share of a single large capital item can exceed your entire annual CAM charge.

01The carve-back: amortization must be tied to the asset’s useful life, not a shorter period of the landlord’s choosing
02The cost-savings exception: cap the annual pass-through at demonstrated savings, not asserted savings
03The interest rate: name it or tie it to a published benchmark, because an unspecified rate is a blank cheque

Protect the denominator, not just the numerator

Exclusions reduce what goes into the CAM pool. Your share of that pool is decided separately, and a good exclusion package attached to a bad denominator still produces a bad number. Name the measurement standard your pro-rata share relies on, constrain the gross-up to genuinely variable costs at a fixed occupancy percentage, and separate controllable expenses from uncontrollable ones before applying any cap.

Language that fails, and language that holds

“Reasonable” without a referent: tie it to a stated cap, a published index, or market comparables
Exclusions that do not survive: make them binding on successors and assigns
“Consistent with prior practice”: this locks in whatever the landlord was already doing
No audit right, or an unusable one: negotiate access to supporting records, not summaries, with a window long enough to use it

What to prioritize when you cannot get everything

01Capital expenditure exclusion with useful-life amortization and a named interest rate
02Audit rights and access to supporting records, with a usable window
03Management fee cap, stated as a percentage of a defined base
04Cap on controllable expenses, with annual versus cumulative specified
05The named measurement standard governing pro-rata share
06Tenant improvement, leasing commission and marketing exclusions
07The longer list of landlord-specific costs

Getting agreed terms into the executed document is the work behind LOI to lease, and enforcing them later is CAM recovery and audit.

Frequently asked questions

Are CAM exclusions standard in commercial leases?: No. There is no standards body defining what may or may not be included in operating expenses. BOMA’s ANSI/BOMA Z65 standards govern floor measurement, not chargeable costs. Certain exclusions recur often enough in executed leases to be treated as conventional, particularly capital improvements, debt service and other tenants’ improvement costs, but a landlord’s standard form usually contains fewer exclusions than a negotiated lease.
Can a landlord pass through capital expenditures as CAM?: It depends entirely on the lease. Without an exclusion, capital costs can be charged in the year incurred. Most negotiated leases either exclude capital items or permit them amortized over the useful life of the asset, often with an exception for improvements intended to reduce operating costs. Check whether your lease names the amortization period and the interest rate.
What is the difference between a CAM exclusion and a CAM cap?: An exclusion removes a category of cost from the pool entirely. A cap limits how much the total, or a defined subset, can increase in a period. They solve different problems and you generally want both.
Do CAM exclusions survive a sale of the building?: Only if the lease says so. Make exclusions expressly binding on successors and assigns. Without that, a new owner may take the position that its own operating expense practice governs.
Is it worth negotiating exclusions for a small location?: Judge it across the portfolio rather than by the site. Exclusion language usually propagates through a standard form used at every location, so winning a capital expenditure carve-out once and carrying it into your template is worth considerably more than the site that prompted it.

Emma Sukenik

Emma Sukenik is REAL’s Director of Business Development, focused on how enterprises recover spend across tax, lease obligations, and CAM reconciliations.

Director of Business Development, REAL

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