Electricity and maintenance for lighting fixtures in parking areas and exterior common areas, including bulb replacements and fixture upkeep.
Key Takeaways
| Lease Type | Recoverable? | Controllable? |
|---|---|---|
| NNN | Yes | Yes |
| Modified Gross | Yes | Yes |
| Full-Service Gross | No | Yes |
CapEx Risk: This line item is commonly used to disguise capital expenditures as operating expenses. Verify all invoices against GAAP standards.
Approximate budget share: 1-3% of total CAM pool.
Parking lot lighting costs appear in CAM reconciliations as two distinct components: electricity consumption and physical maintenance. Electricity is a straightforward operating expense, provided it reflects only the actual power consumed by parking lot fixtures as verified through sub-metering or utility billing data. Physical maintenance, including bulb replacements, ballast repairs, and minor fixture upkeep, is also an operating expense when performed on an ongoing basis. The dispute risk concentrates around LED retrofit projects. When a landlord replaces all parking lot fixtures with LED units, the total project cost can run from $50,000 to several hundred thousand dollars for a large property. That capital expenditure cannot be passed through to tenants in a single reconciliation year. If the lease permits amortization of capital improvements that reduce operating costs, the landlord may recover the LED upgrade over its useful life, typically 10-15 years, but only the annual amortized share belongs in CAM. Tenants should also confirm that any energy savings from the upgrade are reflected in lower electricity charges and not absorbed by the landlord while the capital cost is still being passed through.
Overcharge Risk
$2,000-$15,000/year
typical annual overcharge when this line item is disputed
A full LED retrofit of all parking lot lights - a capital improvement - is billed as a single-year "lighting maintenance" charge rather than being amortized over the energy savings period.
This line item is commonly used to disguise capital expenditures as operating expenses. Capital expenditures must be excluded from CAM or amortized over their useful life per GAAP. If you see unusually high or one-time charges in this category, request all invoices and scope-of-work documentation before paying.
| Legitimate Charge | Suspicious Charge |
|---|---|
| Monthly electricity charges for parking lot lighting backed by sub-meter data | Electricity charges with no sub-metering that bundle tenant space and parking lot usage |
| Annual bulb and ballast replacements on aging fixtures | "LED retrofit" or "fixture replacement program" billed as a single-year maintenance expense |
| Photocell or timer control system minor repairs | Full lighting control system installation billed as routine maintenance |
| Utility pass-through at actual landlord cost per kWh | Per-kWh rate on the reconciliation higher than the utility bill rate, indicating a markup |
Separate electricity costs (operating) from fixture capital improvements (capital). Demand the landlord amortize any full lighting retrofit over the period of energy savings. Request sub-meter data to verify electricity charges reflect actual common area consumption.
Check Your Parking Lot Lighting Charges
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