Management Fee
Management fee means the commercial property management fee a landlord or manager bills for administering a property and its CAM or operating expense pool. Property management fees are usually calculated as a percentage of gross receipts, base rent, CAM costs, or total operating expenses, subject to the lease cap and fee base.
Firm impact
Management fee overcharges are one of the most reliable findings in a CAM audit. Commercial leases often cap the fee at 3% to 6% of gross receipts, revenue, CAM costs, or total operating expenses. Landlords still overbill by using the wrong fee base, charging above the cap, or stacking an administrative fee on top of the management fee.
How this gets abused
A lease caps management fees at 4% of base rents, which creates a $32,000 ceiling. The landlord bills a 5% commercial property management fee on gross receipts ($40,000) plus a separate 2% administrative fee ($16,000), totaling $56,000. Both charges are buried in the CAM pool even though the lease limits the fee base and percentage.
Practitioner note
Pull the exact management fee clause before calculating the finding. Confirm the percentage, fee base, cap language, exclusions, and whether the lease treats an administrative fee as part of the same cap. Then compare the allowed charge against the reconciliation, watching for fee-on-fee math and management fees applied to taxes or insurance when those categories are excluded.
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Frequently asked questions
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