Your lease has no ceiling on annual increases to common area maintenance charges. Without a CAM cap, your landlord can raise your operating expenses by any amount each year, making it impossible to forecast occupancy costs accurately.
By Angel Campa, Founder · Updated March 2026
Flagged when the CAM cap percentage field is null or missing from the lease.
Without a CAM cap, annual operating expense increases are limited only by the landlord's actual costs — or creative accounting. In an average shopping center, CAM charges can increase 5% to 8% annually. For a tenant paying $30,000 in CAM charges in year one, uncapped increases at 7% per year compound to over $59,000 by year ten. That is $97,000 more in total CAM charges over ten years compared to a lease with a 5% annual cap. In volatile markets or properties undergoing major renovations, single-year CAM increases of 20% to 30% are not uncommon when no cap is in place.
Negotiate a CAM cap of 3% to 5% per year on controllable operating expenses. Ensure the cap applies on a non-cumulative (compounding) basis, meaning each year's cap is calculated from the prior year's actual charges, not the original base year. Separate controllable expenses from non-controllable expenses like real estate taxes and insurance, which typically cannot be capped. If the landlord resists a hard cap, propose a cap with a carve-out for extraordinary events like natural disasters.
A reasonable CAM cap is 3% to 5% per year on controllable expenses. Caps below 3% may discourage landlords from properly maintaining the property. Caps above 5% provide limited protection since most annual CAM increases fall within that range anyway.
CAM caps typically apply only to controllable expenses — those the landlord can influence, such as landscaping, janitorial, and management fees. Non-controllable expenses like property taxes and insurance premiums are usually excluded from the cap since the landlord cannot control their increases.
A non-cumulative cap limits each year's increase from the prior year's actual charges. A cumulative cap limits the total increase from a base year, allowing larger single-year increases if prior years were below the cap. Non-cumulative caps provide better year-to-year predictability for tenants.
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