What is CAM?

When you invest in a property in India, whether it's a residential or commercial space, you may come across the term"Common Area Maintenance Charges" or CAM charges. Common Area Maintenance Charges refer to the expenses incurred for the maintenance and upkeep of shared or common areas in a property. Understanding CAM charges is essential for property owners and tenants alike to ensure transparency and effective management of common areas.

Imagine you live in an apartment building with shared spaces like the lobby, elevators, swimming pool, and garden areas. These areas are used by all residents, but someone has to pay for their maintenance and upkeep. That's where CAM charges come in. These charges are a portion of your monthly rent or fees that go towards keeping those shared spaces clean, well-lit, and in good condition for everyone's use and enjoyment. So, CAM Charges are fees collected from residents or tenants to cover the costs of maintaining and repairing the common areas that are shared by all. It helps ensure that the building's shared facilities remain functional and appealing for everyone living there.

Importance of Understanding CAM Expenses

As a property owner, it's important to understand CAM expenses because:

You can pass these costs on to your tenants as part of their rent or lease agreement.
Proper calculation and allocation of these expenses ensure you don't end up paying more than you should.
Tracking CAM expenses helps you manage your overall operating costs efficiently.
Well-maintained common areas keep your tenants happy and attract more people to your property.

Understanding CAM expenses allows property owners to cover the costs of maintaining shared spaces, comply with lease agreements, control expenses, and provide a better experience for tenants – ultimately making the property more valuable and profitable.

Key Aspects of CAM Charges

1. Calculation and Allocation of CAM Charges

CAM charges are typically calculated and allocated based on the size or area of the individual property. The charges may be divided equally among all occupants or allocated based on the proportionate area occupied by each unit. The specific methodology for calculating and allocating CAM charges may vary from property to property, and it is usually mentioned in the terms and conditions of the lease agreement/purchase agreement.

2. CAM Charges and Legal Compliance

Property owners and developers are legally bound to maintain and manage common areas following local laws and regulations. The charges levied for common area maintenance should be reasonable and justifiable. Property owners and tenants need to be aware of their rights and responsibilities regarding CAM charges.

3. Transparency and Accountability

Transparency and accountability in the management of CAM charges are crucial. Property owners and tenants should have access to detailed information about the expenses incurred and the utilisation of funds for common area maintenance.

4. Effective Communication and Participation

Effective communication and participation from all stakeholders are essential for the smooth management of common areas and CAM charges. Property owners, tenants, and the property management or owners' association should maintain open lines of communication to address concerns, share information, and seek feedback regarding common area maintenance.

Difference Between Cam Charges & Apartment Maintenance Fees

CAM Charges are specifically for the upkeep of those shared amenities and common spaces within the apartment complex. They cover costs like cleaning, gardening, security, and maintenance of the shared facilities. They are separate from the other fees you pay for your individual apartment's maintenance, repairs, or property taxes. The amount you pay as CAM Charges is calculated based on the square footage of your apartment and the location/quality of the shared amenities.

It typically ranges from Rs. 2 to Rs. 10 per square foot for residential apartments and Rs. 10 to Rs. 25 per square foot for commercial properties. These charges are regulated by state laws, which can vary. For example, CAM Charges in Maharashtra cannot exceed 10% of the property tax you pay, but there's no such limit in Delhi.

What Is Included In Common Area Maintenance

Some key Common Area Maintenance services include:

Cleaning: Regular cleaning of the lobby, hallways, staircases, and parking lots to keep them tidy and hygienic.
Landscaping: Maintenance of outdoor common areas like gardens, lawns, and courtyards, involving activities like mowing, trimming, and planting.
Pest Control: Regular inspections and treatments to prevent infestations of pests like rodents, insects, or termites in common areas.
Security: Installation and maintenance of security systems like CCTV cameras, access controls, and deployment of security personnel to ensure safety.
Facility Maintenance: Regular upkeep and repairs of shared facilities like elevators, escalators, air conditioning systems, and fire alarms to keep them in working condition.
Security services and personnel
Electricity and water charges for common area
Repairs and maintenance of common infrastructure

Factors That Influence CAM Charges

Here are the factors that influence CAM charges:

Property Size: The larger the property, the higher the CAM charges. A big apartment complex with many common areas like gardens, pools, and clubhouses will have higher charges compared to a small building with just a lobby and parking lot.
Number of Amenities: More shared amenities and facilities like gyms, playgrounds, or banquet halls mean higher maintenance costs and therefore, higher CAM charges.
Type of Services: Basic services like cleaning and landscaping will cost less than comprehensive services that include security, pest control, and maintenance of complex systems like elevators or HVAC.
Utilities: If the common area utilities like electricity, water, and gas are included in CAM charges, higher usage will lead to higher charges.
Property Location: Prime locations or high-demand areas may have higher CAM charges to cover the costs of maintaining high-end facilities and attracting tenants/buyers.
Market Rates: Property owners need to adjust CAM charges based on the going rates in the area and to remain competitive with other properties.

The Final Word

Understanding Common Area Maintenance Charges (CAM charges) is crucial for property owners and tenants in Indian properties. CAM charges cover the expenses associated with the maintenance and upkeep of shared or common areas in a property.

Frequently Asked Questions

1. Are CAM charges applicable to both residential and commercial properties?

Ans: Yes, CAM charges apply to both residential and commercial properties

2. Can CAM charges increase over time?

Ans: Yes, CAM charges can increase over time. The increase in CAM charges may be due to certain factors.

3. What are common area maintenance charges in Indian properties, and what do they cover?

Ans: These are fees paid by residents/owners to maintain shared spaces like lobbies, gardens, and amenities like pools or gyms. The charges cover services like cleaning, security, landscaping, and facility upkeep.

4. How are common area maintenance charges calculated in Indian properties?

Ans: The charges are usually based on the size of your unit, the number of shared amenities, services provided (like cleaning, security etc.), utility costs, and the property's location.

5. Are common area maintenance charges mandatory for all property owners in India?

Ans: Yes, these charges are mandatory for all owners/tenants as per the lease agreement or society bylaws to maintain common areas for everyone's use.

6. Are there any legal guidelines or regulations regarding common area maintenance charges in India?

Ans: Yes, state laws like the Real Estate Act define common areas and regulate these charges to protect the interests of residents/owners.

7. What happens if a property owner fails to pay their share of common area maintenance charges?

Ans: If an owner doesn't pay their share, the housing society, builder or other owners can take legal action like penalties, interest charges or even eviction in some cases.

Common Area Maintenance Charges: A Guide to CAM Charges in Indian Properties

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