Routine maintenance of HVAC systems serving common areas, including filter changes, inspections, fluid top-offs, and minor repairs.
Key Takeaways
| Lease Type | Recoverable? | Controllable? |
|---|---|---|
| NNN | Yes | Yes |
| Modified Gross | Yes | Yes |
| Full-Service Gross | No | Yes |
CapEx Risk: This line item is commonly used to disguise capital expenditures as operating expenses. Verify all invoices against GAAP standards.
Approximate budget share: 5-9% of total CAM pool.
Common area HVAC maintenance covers the routine upkeep of heating, ventilation, and air conditioning equipment that serves shared building spaces: lobbies, corridors, server rooms, and any other areas not exclusively leased to a single tenant. Routine operating costs include filter replacements, refrigerant top-offs, belt and bearing replacements, annual inspections, and minor component repairs. These costs are properly included in the CAM pool and billed to tenants on a pro-rata basis. The dispute risk concentrates around equipment replacement. A full rooftop unit replacement, chiller replacement, or new ductwork installation is a capital expenditure because it extends the useful life of the mechanical system. Under GAAP, capital expenditures must be depreciated over their useful life, typically 15-20 years for HVAC equipment. Only the annual amortized portion belongs in the CAM reconciliation, not the full cost. Some leases contain explicit language limiting HVAC capital expenditures in CAM to an amortized amount not to exceed a per-square-foot threshold. Tenants should compare each year's HVAC line item to prior years and request itemized invoices for any amount that spikes significantly or references replacement rather than repair.
Overcharge Risk
$5,000-$30,000/year
typical annual overcharge when this line item is disputed
The landlord replaces an entire rooftop unit (RTU) in Year 1 of the lease and passes 100% of the cost through as "HVAC maintenance" rather than amortizing it as the capital replacement it is.
This line item is commonly used to disguise capital expenditures as operating expenses. Capital expenditures must be excluded from CAM or amortized over their useful life per GAAP. If you see unusually high or one-time charges in this category, request all invoices and scope-of-work documentation before paying.
| Legitimate Charge | Suspicious Charge |
|---|---|
| Annual filter replacements, belt inspections, and refrigerant checks at consistent rates | "RTU replacement" or "compressor replacement" billed as a maintenance operating expense |
| Minor ductwork repairs and damper adjustments | New ductwork installation billed as routine HVAC maintenance |
| Emergency repairs to an existing unit with documented prior maintenance history | Emergency replacement with no prior service records, especially in the first lease year |
| HVAC capital replacement amortized over 15-20 years per GAAP | Full $40,000 RTU replacement expensed entirely in year one of reconciliation |
Require the landlord to amortize major HVAC replacements per GAAP over the equipment's useful life (typically 15-20 years). Only the annual amortization portion is includable in CAM. Minor repairs and routine maintenance are operating expenses. Request all invoices and distinguish service from replacement.
Check Your HVAC (Common Area) Charges
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