Routine maintenance of HVAC systems serving common areas, including filter changes, inspections, fluid top-offs, and minor repairs.
| 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.
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.
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.
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