Guard services, security monitoring, camera systems maintenance, and access control upkeep for common areas.
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: 6-10% of total CAM pool.
Security and guard services in commercial leases cover the recurring costs of protecting common areas and the building perimeter: guard wages and staffing agency fees, 24/7 monitoring contracts, routine camera system maintenance, and access control software licenses. These are legitimate operating expenses recoverable from tenants in a standard NNN or modified gross lease. The capital abuse pattern emerges when landlords install a new security infrastructure and pass the full cost through in a single reconciliation year. A complete camera system, access control hardware, intercom installation, or security booth construction is a capital expenditure because the equipment has a useful life extending beyond one year. That cost must be amortized over the equipment's useful life, typically 7-10 years, and only the annual amortized share belongs in the CAM pool. Tenants should scrutinize large one-time security charges appearing in the same year as a building sale or major renovation, as these are common timing patterns for improper capital expensing. A request for vendor contracts distinguishing hardware purchase components from service agreements is the first step in any security cost dispute.
Overcharge Risk
$3,000-$79,000/year
typical annual overcharge when this line item is disputed
Installation of a new $100,000 camera and access control system is passed through as "security services" in a single year rather than amortized as a capital system improvement.
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 |
|---|---|
| Monthly guard staffing fees from a licensed security firm at contract rates | "Security system installation" or "camera infrastructure upgrade" billed as a single-year operating expense |
| Annual monitoring contract for existing camera and access control systems | New monitoring contract with hardware purchase components bundled into the monthly fee |
| Routine maintenance and software updates for an existing security system | Full access control system replacement billed as maintenance in the year of a building sale |
| Security cost increases consistent with a documented contract rate adjustment | A 60%+ cost spike with no explanation and no prior documentation of the need for new infrastructure |
Separate recurring security service fees (guards, monitoring) from capital security system installations. Hardware and system installations must be amortized or excluded. Request vendor contracts to verify what is a service fee versus an equipment purchase.
Check Your Security & Guard Services Charges
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Go to lextract.ioThis 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.
