What are CAM charges and why should you care?

Tenant File CAM Charge Posting

CAM stands for  (Common Area Maintenance) , and they are charges which you post to a group of Tenants. Most commonly, CAM charges are for expenses such as building maintenance, taxes, or insurance. So the most common use is for commercial property, however, any Tenant File user can take advantage of its CAM posting ability for other types of charges.

Now, these charges are only to the ‘tenant’, so you can only select accounts that are specifically created to post only to the Tenant’s Ledger in the program. You could set up a single expense account called ‘CAM Charge’, or you could create several different more specific charges, such as one for ‘Utilities’, another for ‘Grounds Maintenance’, and another for ‘Insurance Costs’. These expenses are typically paid by the owner (or manager) and then ‘passed through’ to the tenant, so they are also referred to as ‘pass through’ charges.

Here’s an example on how to post something. Let’s say you have a bill for ‘Grounds Maintenance’, and you want to pass the expense to your tenants.

  • Do you want to divide it equally among all tenants?
  • Do you want to divide it according to their rental space size (square footage)?
  • Do you want to divide it according to ‘leased’ space, ignoring vacant rentals?

These type of questions will determine how much is charged to each tenant. You can even use the amount (or percentage of rent) that is entered in one of the three ‘recurring fields’, found in the information for every rental unit.

Furthermore, you don’t have to charge this to every tenant. You can just select a specific owner and charge only to that Owner’s tenants. You can even choose a specific property or building for the charge, or even just one tenant.

Another example: You charge a specific Owner‟s Tenants for Maintenance, Taxes, and Insurance once a month. The yearly charge of all 3 combined is $12,000, and you have 6 Tenants for this Owner. That means each month, a $1,000 (12k / 12 months) charge would need to be divided amount that Owner‟s Tenants.

1. Under ‟select how to allocate’, you would choose if you want the charge divided evenly among the 6 Tenants, base it on each Tenant‟s total of the total square footage, include only leased units, etc.

2. Under ‘Charge to’ you would choose ‘All Tenants of one or more Owners, and choose the Owner‟s name from the list.

3. Lastly you would select the account. You have 2 choices:
#1. If you want one transaction to appear in the ledger for each Tenant, you would set up one account for all 3 charges (Maintenance, Taxes, and Insurance) and call it something like ‘Monthly CAM Charges’. Then click the ‘Choose Accounts’ button and set up this charge, using the amount $1,000.
#2. If you want detail of the transactions for more detailed reporting, you would set up 3 accounts, one for ‘Maintenance Fees’, another for ‘Monthly Taxes’, and another for ‘Insurance Fees’. Then click the ‘Choose Accounts’ button and set each of these up. The ‘total’ for all 3 would add up to $1,000. You will see that total next to the ‘TOTAL amount to be allocated’ field.

Your settings are saved, so you only have to set this up once. Each month, you would need to enter this screen and click the ‘Post CAM Charges NOW’ button. Of course, if you only charge CAM charges once a quarter or once a year, you would divide the total $12,000.00 charge differently.

So, while CAM charge posting is normally used for commercial property, you can probably see other uses for residential property. For example, if you manage a mobile home park, you might want to allocate an electric bill to all tenants in the park. Or, if you manage a fourplex, there might be charges that you want to allocate to your tenants on a regular basis. If you manage a gated community, you might want to allocate a security fee or a HOA fee. As long as you are posting to a tenant ledger, there is no limit to your options.