There is an argument that often goes on by and between owners and leasing agents. An owner would often only like to pay a commission on the value of the total base rent and not on the collection of CAMs. By doing so the owner believes he is doing the right thing (or simply wants to cut the leasing agent out of some earned funds). The counter-argument from the leasing agent then often becomes, "Mr. Owner, if you were going to lease on a Gross basis you would be including all the CAMs and the total value of the lease would be the Gross amount. Why is there a difference between the Gross Lease and a NNN lease"?
Thus, if the owner expects to collect a security deposit on both the base rent and the anticipated CAMs, it should lend to the conclusion that the leasing agent should collect a commission on the same basis.
This owner-approach often then turns into an argument between the owner and his professional management company. The owner not wanting to pay a property management fee on the collection of CAMs and the property management company knowing that it actually is harder to collect rents on base and CAMs than on a Gross Lease amount, since each year the expense of CAMs must be justified to tenants for increase purposes.
The solution to all this is to be very clear in writing the leasing or property management contract just how fees are to be collected. Also, clarify just how security deposits are to be calculated.
Rob Baird, CA RE Lic. #544165 (one of the oldest active RE Licenses in CA)
Aug 2, 2010