Launching or formalizing a CAM (Common Area Maintenance) program in a California shopping center or mixed-use project is not just an accounting exercise. It’s a legal, operational, and political project that touches every lease, every association document, every vendor contract, and—thanks to new laws—several parts of the California Civil Code.

This guide is written for owners and operators who want a CAM framework that actually works in the real world: predictable for tenants, defensible under California law, and aligned with how your property is really run.

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🎯 Who this guide is for

This hub is designed for:

• Owners and asset managers of California shopping centers and mixed-use projects (retail + residential or office).
• Property managers tasked with rolling out a first formal CAM program or cleaning up a legacy one.
• In-house GCs, CFOs and family-office principals who want CAM language, CC&Rs, vendor contracts, and budgets to stop contradicting each other.
• Developers bringing a new mixed-use project online and pre-leasing space off pro forma CAM estimates.

If you recognize yourself in any of those roles, this is the system-level view you need before you sign another lease or vendor contract.

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🧩 What a CAM program really is in a mixed-use project

At a basic level, CAM is the mechanism by which you recover the cost of running your common areas: parking, lobbies, corridors, landscaping, security, utilities, management and similar “operating expenses.”

But in a California mixed-use asset, your “CAM program” is really:

• The governing documents (CC&Rs, REAs, association bylaws) that define common areas and allocate responsibility and assessments.
• The leases (commercial and residential) that convert those obligations into “additional rent” and fees.
• The vendor and subcontractor contracts that actually perform the work and set your true costs.
• The internal processes you use to budget, reconcile, and communicate CAM charges.

When any one of those layers is out of sync with the others, CAM turns from a predictable revenue-recovery tool into a litigation and tenant-relations problem.

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🧮 How CAM charges are built and reconciled

In most retail and commercial settings, tenants pay:

• Base rent; plus
• A pro rata share of CAM / operating expenses, property taxes, and insurance, often labeled as “triple-net” (NNN) charges. ()

Key moving parts:

• Pro rata share.
  Typically: tenant’s rentable square footage ÷ total rentable square footage in the CAM pool. In a mixed-use project, you often have multiple pools (e.g., “Retail Only,” “Residential Only,” “Shared Core”).
• Budget vs. actuals.
  You set an annual CAM budget, bill monthly estimates, then perform a year-end reconciliation comparing estimates to actual costs, with credits or catch-up charges. Industry practice—and most lease commentary—emphasizes clear reconciliation statements and backup detail to avoid disputes.
• Caps, base years and gross-up.
  • CAM caps on controllable expenses (e.g., 5–8% per year) are common, with taxes and insurance excluded from the cap.
  • In “base-year gross” leases, the tenant pays increases over a defined base year; gross-up provisions adjust expenses to a normalized occupancy (e.g., 95%) so early tenants do not shoulder vacant-space costs.

Tenants increasingly negotiate audit rights and detailed CAM definitions because they know vague language and opaque reconciliations are where overcharges hide.

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🏘️ Mixed-use complications: retail vs. residential vs. associations

Mixed-use projects sit inside California’s common interest development (CID) framework: recorded CC&Rs, associations, and a statutory overlay (Davis-Stirling Act; Commercial & Industrial CID Act). (California Department of Real Estate)

Common friction points:

• Multiple associations and cost pools.
  A typical mixed-use project may have:
  • A master association (parking, core systems, façade).
  • A residential sub-association (amenities, residential corridors).
  • A commercial or retail sub-association (retail-only marketing, signage).
• CC&Rs vs. leases.
  CC&Rs and association documents generally:
  • Define what is “Common Area” versus exclusive use areas.
  • Allocate maintenance responsibility and assessments between segments.
  • Set the association’s budgeting and collection powers. (California Department of Real Estate)
    If your leases ignore those rules—or contradict them—you can end up promising tenants cost structures that your association budgets cannot deliver.
• Residential habitability vs. retail operations.
  Residential owners and tenants may prioritize quiet enjoyment and security; retail tenants prioritize access, traffic, signage and parking. Balancing these priorities often requires more granular CAM pools and carefully drafted use and operating covenants.

A well-designed CAM program for a mixed-use project starts with understanding and, if needed, updating the governing documents, then aligning your leases and vendor contracts to that baseline.

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📜 CAM in your commercial leases

For commercial tenants, CAM and operating-expense provisions are usually among the most heavily negotiated parts of the lease.

Core issues you should address clearly:

• Definitions and landlord control.
  • Define “Common Areas” precisely: parking, access drives, lobbies, stairwells, loading areas, restrooms, landscaped areas, signage zones, etc.
  • Preserve needed control rights: reconfiguration, partial closures for repairs, new improvements, parking and circulation changes.
• Inclusions, exclusions and gray areas.
  • Typically included: janitorial, trash, landscaping, security, utilities for common areas, routine repairs, property management/admin fee, property taxes, property insurance. ()
  • Common exclusions: debt service, income taxes, leasing commissions, costs benefiting only specific tenants, excessive overhead, many capital expenditures (except amortized code-mandated items).
  • Gray zones: energy efficiency upgrades, ADA retrofits, major roof/HVAC replacements, marketing funds. These need explicit treatment (e.g., amortization over useful life, or landlord-only costs).
• Caps and audit rights.
  • Spell out whether caps apply to all CAM or only “controllable” items.
  • Provide audit rights with sensible guardrails (time limits, confidentiality, cost-shifting only if variance is minimal).
• New SB 1103 (Commercial Tenant Protection Act) overlay.
  Beginning January 1, 2025, SB 1103 adds special protections for certain “qualified commercial tenants” (micro-enterprises, small restaurants, small nonprofits) including transparency and limits on “building operating cost” pass-throughs.
  For covered tenants, Civil Code §1950.9 imposes requirements like:
  • Documented allocation methodology for building operating costs (which include common-area maintenance and unmetered utilities).
  • Supporting documentation before such costs may be charged;
  • Limits on changing the allocation method to increase a qualified tenant’s share.

If your leases do not anticipate SB 1103, your CAM language may functionally be partially unenforceable for some tenants after 2025.

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🏡 Residential units, rent caps and utility pass-throughs

For residential components, your CAM-style charges are constrained by a different statutory overlay.

• AB 1482 – California Tenant Protection Act of 2019.
  AB 1482 imposes:
  • An annual rent cap (generally 5% + CPI, capped at 10% per year) for many residential units; and
  • Just-cause eviction rules after 12 months of tenancy. (San Francisco Government)
    Excessive or poorly structured “fees” and add-ons can draw scrutiny if they function as disguised rent increases.
• Water submetering and SB 7.
  California’s SB 7 and related Civil Code provisions require most new multifamily and mixed-use residential/commercial structures that apply for water service after January 1, 2018 to install individual meters or submeters and bill residents based on actual usage on a “just and reasonable” basis, with specific disclosure rules. (LADWP)

Together, these regimes mean you cannot simply treat residential tenants like another CAM pool. You need a residential fee and reimbursement structure that respects rent caps, habitability obligations, and utility-billing rules, and that still meshes with your overall CAM program.

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🤝 Vendor and subcontractor contracts that support your CAM program

Every CAM line item traces back to a vendor contract: landscaping, janitorial, security, parking, elevators, HVAC, fire/life safety, snow removal (in some markets), and so on. If vendor scopes and pricing aren’t aligned with your lease and CC&R framework, your CAM math will never work.

Key elements to tighten:

• Service-level agreements (SLAs).
  • Define frequencies and standards (e.g., parking lots swept nightly, landscaping maintained to specified standards, response times for elevator outages).
  • Build in performance metrics and cure periods; consider credits or fee reductions for chronic service failures.
• Risk allocation and insurance.
  Vendor agreements should match (or exceed) the indemnity and insurance expectations baked into your CC&Rs and building policies:
  • Additional insured requirements, primary/non-contributory language, waivers of subrogation, and clear indemnity allocations for injury or property damage in common areas.
• Pricing structure vs CAM structure.
  • If you have CAM caps on controllable expenses, be very careful with vendor contracts that include automatic escalators, fuel surcharges, or open-ended “extra services.”
  • Multi-year contracts should be mapped against your leases so you don’t lock in cost growth that caps make non-recoverable.

A clean CAM program aligns what you promise tenants, what governing documents require, and what you actually pay vendors to do.

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⚖️ California legal landmines you need to design around

A few recent (and not so recent) developments are especially important for CAM programs.

• Thrifty Payless v. The Americana at Brand – CAM estimates and fraud.
  In Thrifty Payless, Inc. v. The Americana at Brand, LLC, a shopping-center tenant alleged that pre-lease estimates of taxes, insurance and CAM were dramatically understated compared to what the landlord expected to charge once the center opened; later triple-net charges exceeded the estimates by several hundred percent.
  The California Court of Appeal allowed Thrifty’s fraud and negligent-misrepresentation claims to proceed despite an integration clause and despite the final lease omitting the prior numbers. Extrinsic evidence of misrepresentation was admissible. Takeaway: “Estimates” of CAM and pass-through costs—especially in letters of intent for new centers—cannot be treated as harmless marketing fluff. If you know they’re unrealistic or you have no reasonable basis for them, you’re creating potential fraud exposure.
• SB 1103 – Commercial Tenant Protection Act (effective 2025).
  SB 1103 adds a suite of protections for small “qualified commercial tenants,” including:
  • Stricter requirements for charging “building operating costs” (which encompass common-area maintenance and non-metered utilities);
  • Documentation and transparency obligations; and
  • Limitations on restructuring allocations in a way that increases a qualified tenant’s share. (
• AB 1482 – Rent caps and just cause.
  For residential components, AB 1482’s rent caps and just-cause protections mean you must treat “additional rent” and recurring fees with the same care as base rent. (San Francisco Government)
• SB 7 and water submeters.
  SB 7’s submetering requirement for new multi-unit and mixed-use buildings means that for many residential tenancies, water and sewer charges will be governed by per-unit consumption, not lump-sum CAM allocation. ()

A CAM program built without these statutes in mind may work on paper but fail when challenged—or when you try to roll it out to tenants protected by the newer laws.

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🧱 Building a “clean” CAM program: from audit to implementation

For a California shopping center or mixed-use project, a practical roadmap usually looks like this:

• Map the physical and operational reality.
  Identify all shared facilities and services: parking, circulation, lobbies, roofs, MEP systems, elevators, loading docks, trash, security, amenities, EV charging, solar, etc.
• Inventory documents.
  Gather:
  • CC&Rs, REAs and association bylaws (including any amendments);
  • Commercial lease forms and major negotiated leases;
  • Residential lease forms and addenda;
  • Key vendor and management contracts;
  • Recent CAM budgets and reconciliation packages.
• Design cost pools and allocation rules.
  Based on your governing documents and actual operations, define:
  • Retail-only, residential-only and truly shared cost pools;
  • Allocation keys (square footage, unit count, parking stalls, usage-based metrics);
  • Where association assessments end and landlord-level CAM begins. (California Department of Real Estate)
• Update documents to match.
  • Amend CC&Rs or REAs where necessary to clarify maintenance responsibilities and assessment formulas. (California Department of Real Estate)
  • Refresh commercial lease forms for SB 1103 compliance and clear CAM definitions.
  • Align residential lease forms with AB 1482 and SB 7 where applicable.
• Institutionalize the process.
  • Set an annual calendar for budget approval, reconciliation, and communications.
  • Standardize reconciliation packages (narrative summary + detail + backup).
  • Train property-management staff on the legal framework so they don’t “invent” CAM practices that conflict with documents.

A well-run CAM system is as much about process discipline as it is about the wording of any single clause.

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📊 Color-coded reference tables

🟢 CAM cost categories at a glance

(Use this as an HTML block in WordPress; colors are applied inline.)

Based on typical industry practice in commercial leases and CAM commentary. ()

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🟦 California legal overlay on CAM and operating costs

High-level summary only; always confirm current statutory text.

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🟨 Document alignment matrix

Use this when you audit your existing CAM framework.

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❓ FAQ – practical questions owners ask about CAM programs

These are questions that come up repeatedly when owners and managers move from a “rough” CAM setup to a disciplined program.

Is CAM the same thing as triple-net (NNN) rent?
Not exactly. “NNN” is a shorthand for leases where tenants pay base rent plus their share of taxes, insurance, and CAM/operating expenses. CAM is one component of that structure: the common-area and operating-expense bucket. You can have NNN-style economics with different labels and you can have CAM-style charges in leases that aren’t truly “NNN.”

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Can we roll out a new CAM program mid-lease term, or do we need to wait for expirations?
Operationally, you can improve your budgeting and reconciliation processes immediately. But any change that shifts cost allocations or adds new categories of recoverable expense typically requires lease amendments or, at least, careful application of existing language. For new tenants, you can embed the new system in your forms; for existing tenants, consider targeted amendments tied to renewals, expansions or other concessions.

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How often should we revisit our CAM structure and documents?
At minimum, you should revisit annually for budget and reconciliation, and more deeply whenever there are material changes: new building systems (EV chargers, solar, major amenities), changes to association documents, or new legal developments like SB 1103. A full document and process audit every few years is realistic for most portfolios.

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Do national and local tenants need different CAM provisions?
The underlying math and pools can be the same, but national tenants often push for:

• Tighter exclusions (especially on capital items and overhead);
• More detailed audit rights; and
• CAM caps and marketing-fund governance.
  Local tenants may accept shorter CAM provisions but still benefit from the discipline of a well-designed program. The key is to maintain a consistent economic model while accommodating different levels of legal detail.

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Who should own the CAM program day-to-day: property management, accounting, or legal?
All three have a role:

• Property management understands operations and tenant expectations.
• Accounting ensures accurate categorization, allocation, and reconciliation.
• Legal designs and maintains the framework (leases, CC&Rs, vendor contracts, compliance with SB 1103, AB 1482, SB 7, etc.).
  In practice, you want one designated CAM “owner” who coordinates these functions and ensures that business practices don’t drift away from what your documents allow.

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What should we have ready before asking counsel to review our CAM program?
You’ll get the most value if you can provide:

• Current and sample past CAM budgets and reconciliation packages;
• A stack of representative commercial and residential leases;
• All recorded governing documents (CC&Rs, REAs, bylaws) and amendments;
• Major vendor/management contracts and insurance summaries; and
• A short narrative from your team explaining “how we think it works now” and where tenants are pushing back.

With that, counsel can quickly identify misalignments, statutory risks, and low-hanging fixes.

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💼 How I typically help clients with CAM and mixed-use projects

For owners and operators of California shopping centers and mixed-use projects, a typical engagement to “clean up” or launch a CAM program often includes:

• A document and process audit (governing documents, leases, vendor contracts, budgets and reconciliations).
• A written CAM architecture memo mapping cost pools, allocation rules, and statutory overlay.
• Targeted updates to lease forms, addenda and association documents to reflect that architecture.
• A playbook for property management and accounting: calendar, templates and communication standards for budgets and reconciliations.
• On-call support for complex tenant negotiations, large build-outs, and vendor contract changes that impact CAM.

If you operate a California shopping center or mixed-use project and want your CAM program to be clear, enforceable, and aligned with how your property actually runs, this is exactly the type of work I focus on.