Ongoing upkeep of parking areas - sweeping, striping, pothole repair, lighting maintenance, and snow removal - included in the CAM pool for properties with shared parking. Large periodic repaving projects may be capital expenditures.
Routine parking lot maintenance (sweeping, crack sealing, restriping) is an operating expense. Full repaving or resurfacing that extends the parking lot's useful life is a capital expenditure that should be amortized rather than expensed in a single year.
A landlord repaved the entire parking lot ($580,000) after 18 years of use and expensed 100% of the cost in year one as 'routine maintenance.' All tenants received a single-year CAM true-up of $8,700 per tenant.
Request the scope of work for any parking lot cost over $79,000. If the work description includes "full depth reclamation," "mill and overlay," or "new asphalt," it is likely a capital expenditure requiring amortization.
Worried about parking lot maintenance in your lease?
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
