Can the landlord mark up electricity rates when passing them through to tenants?

No. Utility pass-throughs must reflect actual cost to the landlord without any markup. Resale of electricity in most states requires a utility license. Landlords may only pass through the amount shown on the utility bill, allocated pro-rata. Request copies of actual utility bills to verify the per-kWh rate used in calculations.

How do I know whether I'm paying for electricity used by the landlord's construction?

Request utility bills and compare monthly kWh consumption to prior years. If consumption spikes coincide with landlord construction periods and return to normal afterward, this is strong evidence the construction used your common area circuits. Also ask for sub-meter readings that would isolate the circuit locations of consumption spikes.

Can the landlord mark up electricity rates when passing them through to tenants?

No. Utility pass-throughs must reflect actual cost to the landlord without any markup. Resale of electricity in most states requires a utility license. Landlords may only pass through the amount shown on the utility bill, allocated pro-rata. Request copies of actual utility bills to verify the per-kWh rate used in calculations.

How do I know whether I'm paying for electricity used by the landlord's construction?

Request utility bills and compare monthly kWh consumption to prior years. If consumption spikes coincide with landlord construction periods and return to normal afterward, this is strong evidence the construction used your common area circuits. Also ask for sub-meter readings that would isolate the circuit locations of consumption spikes.

Electricity (Common Area): CAM Line Item Audit Guide

Electricity charges for common areas including lobby lighting, elevators, exterior signage, and shared mechanical equipment.

Recoverability & Controllability by Lease Type

Lease Type	Recoverable?	Controllable?
NNN	Yes	No
Modified Gross	Yes	No
Full-Service Gross	No	No

Approximate budget share: 10-15% of total CAM pool.

Common Abuse Patterns

Landlords tap common area electrical circuits for construction or their own use during building renovations, then pass those costs through as common area electricity.

Red Flags to Watch

Electricity costs spike during periods of landlord construction or renovation
No sub-metering isolating common area from tenant suite consumption
A markup percentage applied to electricity pass-throughs
Common area electricity increases despite reduced occupancy and operating hours

Your Right to Dispute

Require sub-meter audits to verify common area electricity consumption. Prohibit markups on utility pass-throughs. Challenge any construction-period electricity charges as the landlord's cost, not a tenant operating expense. Request utility bills showing the actual kWh consumed and the rate paid.

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Related Resources

GlossaryCAM Glossary GlossaryControllable Expenses ResourcesCAM Audit by State ToolsFree CAM Audit Tools

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This 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.