Sublease CAM pass-throughs create extra layers of allocation error, and an estimated 15-20% of subleases have ambiguities that lead to overcharges.
A sublease CAM pass-through clause defines how Common Area Maintenance charges flow between the prime tenant, subtenant, and landlord when a tenant subleases all or part of its space. It establishes whether the subtenant pays CAM directly to the landlord, to the prime tenant, or through a different allocation mechanism.
In sublease situations, CAM obligations can create confusion and double-charging. The prime tenant remains liable to the landlord under the master lease, but the subtenant is often responsible for a share of expenses under the sublease. Without clear language, the prime tenant may end up paying CAM charges that the subtenant was supposed to cover, or the subtenant may be double-charged for expenses already included in the sublease rent.
“Subtenant shall pay to Sublandlord, as Additional Rent, Subtenant's Proportionate Share of all Operating Expenses charged to Sublandlord under the Master Lease. Subtenant's Proportionate Share shall be calculated by dividing the rentable square footage of the Subleased Premises by the total rentable square footage of the Master Lease Premises. Sublandlord shall provide Subtenant with copies of all reconciliation statements received from the Master Landlord within ten (10) days of receipt. Subtenant shall have the right to audit the Master Lease Operating Expense calculations to the same extent Sublandlord has such rights under the Master Lease.”
This is illustrative language only. Your actual lease language controls your rights.
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15-20%
An estimated 15-20% of commercial subleases contain CAM allocation errors or ambiguities that lead to overcharges [industry estimate]
Source: Commercial Real Estate Sublease Analysis (2024)
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