An accounting method that spreads the cost of a long-lived asset over its useful life. Depreciation is almost universally excluded from commercial lease CAM definitions - tenants pay for actual expenses, not accounting allocations.
Depreciation is a non-cash charge that reduces the book value of an asset. Including depreciation in the operating expense pool would mean tenants pay for the theoretical decline in asset value rather than actual maintenance and operating costs.
A landlord included $450,000 of building depreciation in the annual operating expense pool. Tenants paid a pro-rata share of this non-cash accounting entry. The lease explicitly excluded 'depreciation' - the inclusion was a direct violation.
Review the CAM pool for any line items described as 'depreciation,' 'amortized assets,' or similar non-cash entries. Request the accounting basis for any amortized item - it may be depreciation disguised as an amortized capital expense.
Ready to check your numbers? Start a free CAM scan.
Scan My Lease NowUpload two PDFs. 12 detection rules. Under 5 minutes. Free.
Start Free AuditThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.