Beware of Extra Fees in Commercial Leases

By On Behalf of Giddens & Gatton Law, P.C. | November 4, 2013

When business owners look for a location for their business, they should have some concerns about negotiating their commercial lease. Unlike residential leases which often charge monthly rent and a late fee, commercial leases in New Mexico often contain many other charges beyond the base rent.

Commercial landlords seek to recoup many of the expenses which may apply to all of their tenants in a particular shopping center or building, referred to as Common Area Maintenance (CAM) charges.  These charges which may be passed on to tenants proportionately include the following:

  • A monthly or quarterly charge for general landscaping or lawn upkeep performed on the common premises
  • Utility bills, which tend to occur when the utility bills are the responsibility of the landlord and represent bills that include the sum of charges for all the units in a building or shopping center
  • Signage fee for signage in front of a shopping center
  • Marketing fees
  • Local property taxes

Frequently, when commercial realtors advertise certain spaces they give little or no indication what those fees may be, causing a prospective tenant to think they will be paying less than the actual cost. Also some realty agents may leave an impression that such elements are so customary that they are nonnegotiable. In fact, in many instances, a savvy negotiator can negotiate on CAM charges and other parts of the eventual lease especially when the landlord has high vacancy rates. When you consider how vital a commercial lease is to a business and how it can saddle the business with certain costs for years, it is advisable to retain legal counsel to represent you in such negotiations.

Attorney George “Dave” Giddens has spent 30 years negotiating commercial leases for many types of businesses. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.

Posted in Commercial Real Estate