The systems and practices used to manage rainwater runoff on a commercial property, including storm drains, retention ponds, bioswales, and drainage infrastructure. Stormwater management fees and maintenance costs may be passed through as CAM expenses.
Stormwater management for commercial properties includes maintaining storm drain inlets, underground piping, detention and retention basins, bioswales, permeable pavement systems, and oil-water separators. Many municipalities assess stormwater utility fees based on impervious surface area. These fees, along with routine maintenance (drain cleaning, basin inspection, sediment removal), are operating expenses. Major infrastructure projects (installing new retention systems, regrading drainage) are capital expenditures.
A landlord installed a new stormwater retention system to comply with updated municipal codes at a cost of $210,000. The full installation cost was passed through CAM in a single year as "drainage maintenance." The retention system had a 25-year useful life and should have been either excluded from CAM (as a code compliance capital cost) or amortized.
Check whether stormwater charges on your reconciliation are routine maintenance fees or capital infrastructure costs. Municipal stormwater fees are typically a fixed annual charge and should not spike unexpectedly. Large drainage-related expenses likely involve capital work.
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Find My OverchargesThis 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.
