What expenses should always be excluded from CAM charges?

At minimum, your exclusion clause should cover: capital expenditures (except code compliance), landlord overhead and corporate salaries, leasing commissions, tenant improvement costs, depreciation, marketing expenses, fines or penalties, and costs of disputes with other tenants. The more specific and comprehensive, the better.

Can a landlord pass through excluded expenses under a different name?

Yes, this is a common tactic. Landlords sometimes relabel excluded costs (e.g., calling a capital improvement a "repair" or bundling overhead into "administrative fees"). This is why the exclusion clause should define terms precisely and why regular auditing is essential.

Does CAMAudit catch expenses that should have been excluded?

CAMAudit's Rule 2 (Excluded Service Charges) uses AI classification to compare each line item on the reconciliation statement against your lease's exclusion list. It flags charges that appear to fall into excluded categories, helping you recover improperly passed-through costs.

CAM Exclusion Clause

Last updated: April 2026

By Angel Campa, Founder

CAM exclusion clauses prevent landlords from padding your bill with capital costs, overhead, and ownership expenses that can add $0.50-$2.00/sqft in improper charges.

What Is a CAM Exclusion Clause?

A CAM exclusion clause lists specific expense categories that the landlord is prohibited from passing through to tenants as part of Common Area Maintenance charges. These exclusions typically cover items like capital expenditures, landlord overhead, leasing commissions, and costs that benefit only one tenant. The clause serves as a contractual filter on what qualifies as a recoverable operating expense.

Why This Clause Matters for CAM Audits

Exclusion clauses are the primary defense against landlords padding CAM bills with costs that should not be passed through. If the exclusion list is vague or missing, landlords can include virtually any building-related cost in the CAM reconciliation. A comprehensive exclusion clause can save tenants significant amounts each year by preventing improper pass-throughs.

Sample Lease Language

“Operating Expenses shall not include: (a) costs of capital improvements, except those made to reduce Operating Expenses or required by governmental regulation enacted after the Commencement Date, amortized over their useful life at a reasonable interest rate; (b) leasing commissions, marketing costs, and tenant improvement allowances; (c) costs incurred in connection with the sale, financing, or refinancing of the Building; (d) depreciation or amortization of the Building; (e) executive salaries above the level of property manager; (f) fines, penalties, or interest resulting from Landlord's negligence.”

This is illustrative language only. Your actual lease language controls your rights.

Red Flags to Watch

⚠Exclusion list is missing or contains fewer than 5 items
⚠Broad language like "including but not limited to" in the operating expense definition undermines the exclusion list
⚠Capital expenditure exclusion has overly broad exceptions (e.g., "any cost landlord deems necessary")
⚠No exclusion for landlord overhead, executive compensation, or corporate allocation charges
⚠Exclusion list uses vague terms that allow landlord recharacterization of expenses

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Negotiation Tips

✓Negotiate at least 15-20 specific exclusion items covering capital costs, overhead, leasing costs, and ownership expenses
✓Ensure the operating expense definition says "limited to" rather than "including but not limited to"
✓Add a catch-all exclusion for any cost not directly attributable to the operation and maintenance of common areas
✓Include a provision that any new expense category not listed must be approved by tenant before inclusion

Key Data

$0.50-$2.00/sqft
Tenants without comprehensive exclusion clauses may overpay by an estimated $0.50 to $2.00 per square foot annually in improperly passed-through costs [industry estimate]
Source: BOMA / Lease Audit Industry Reports (2023)

Explore Other Lease Clauses

Audit Rights Clause CAM Cap Clause Gross-Up Provision Management Fee Clause Pro-Rata Share Definition Clause Base Year Stop Clause Controllable vs Non-Controllable Expense Clause Capital Expenditure Exclusion Clause Self-Help Remedy Clause Reconciliation Statement Deadline Clause Co-Tenancy Clause Operating Expense Definition Clause

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CAM Line ItemCapital Improvements / CapEx CAM Line ItemLegal & Professional Fees Lease TypeTriple Net Lease (NNN)Lease TypeModified Gross Lease Detection RuleExcluded Service Charges Detection RuleGross Lease Charges

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Related Resources

Detection RuleExcluded Service Charges Detection RuleGross Lease Charges Detection RuleCommon Area Misclassification CAM Line ItemCapital Improvements / CapEx CAM Line ItemLegal & Professional Fees Lease TypeTriple Net Lease (NNN)

Frequently asked questions

Need to extract lease terms before your audit?

A CAM audit is only as accurate as your lease data. lextract.io extracts 126 structured fields from any commercial lease PDF: CAM definitions, pro-rata share, caps, base year, and audit rights. So you have the exact terms your landlord is supposed to follow.

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This 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.