HVAC charges in a CAM reconciliation raise a specific question that other line items don't: is this for a system that serves common areas, or is it for equipment that serves your space? The answer determines whether the cost belongs in the CAM pool or whether it's a cost that should never have left your landlord's service team.
How HVAC Systems Are Structured in Multi-Tenant Buildings
Commercial buildings serving franchise retail tenants typically have one of three HVAC configurations:
Centralized common area HVAC: The landlord operates a central system that conditions corridors, vestibules, restrooms, lobbies, and other common areas. Individual tenant spaces are conditioned by separate tenant-controlled systems (rooftop units or split systems). In this configuration, the landlord's HVAC cost is clearly common area.
Shared systems with tenant branches: A central plant serves both common areas and tenant spaces, with VAV boxes or fan coil units distributing conditioned air to individual suites. Operating and maintenance costs for the central plant are CAM; costs for tenant-specific distribution equipment are typically not.
Fully independent systems per tenant: Each tenant has their own dedicated rooftop unit (RTU) or split system serving only their space. In this configuration, there should be minimal HVAC cost in the CAM pool — perhaps ventilation for restrooms or makeup air for the building's common areas, but not mechanical cooling for individual tenant suites.
What Belongs in CAM vs. What Belongs to You
Legitimate common area HVAC CAM charges:
- Operating and maintenance of HVAC systems serving lobbies, corridors, shared restrooms, and vestibules
- Common area HVAC systems in enclosed malls or food courts
- Mechanical ventilation for parking garages
- Preventive maintenance contracts for common area equipment
- Repairs to common area HVAC equipment (compressors, coils, controls)
Costs that are typically not CAM:
- Repairs or maintenance on HVAC equipment that serves only your leased space
- Rooftop unit maintenance for units exclusively serving your suite (unless the lease assigns this to the landlord)
- Filter replacement inside your space
- Ductwork repairs within your demised premises
Where the allocation gets complicated:
- Makeup air units that serve multiple tenants through shared shafts
- Cooling towers or central plants in a mixed-use building
- HVAC systems in a building where the original common/tenant boundary was never clearly documented
Lease Language That Controls This
Look for two provisions in your lease:
The HVAC maintenance responsibility section. This typically says something like "Tenant shall maintain, repair, and replace the HVAC unit(s) serving the Premises" or "Landlord shall maintain the base building HVAC systems; Tenant shall maintain the supplemental HVAC serving the Premises." If your lease assigns in-suite HVAC to you, the landlord can't pass maintenance costs for your system through CAM.
The CAM expense definition. Legitimate common area HVAC should be described in this section. If the definition limits CAM to "costs associated with the common areas as defined in Exhibit A," and Exhibit A doesn't include any HVAC equipment inside your suite, in-suite HVAC costs are excluded.
Identifying the Problem in a Reconciliation
Most reconciliations consolidate HVAC costs into a single maintenance line or break them out under "mechanical" or "building systems." You can't always tell from the line item label alone whether the charge is for common or tenant equipment.
Step 1: Check the dollar amount and context. For a typical strip mall with minimal common area conditioning (lobby, restrooms), HVAC-related CAM might run $2,000–$8,000 annually for the whole property. If you see $40,000 in an HVAC line, something is driving that number and you need to know what.
Step 2: Request the invoices for HVAC work. Invoices for HVAC maintenance and repair will identify the equipment by location (e.g., "RTU-3 serving Suite 115") or by description (e.g., "restroom exhaust fan repair"). Equipment serviced inside a specific tenant's suite should not appear in CAM.
Step 3: Compare to your lease's equipment exhibit. Many leases attach an exhibit listing which HVAC equipment is the landlord's responsibility and which is the tenant's. Match invoice equipment identifiers against this exhibit.
Step 4: Ask for a building systems map. This isn't always available, but for newer buildings the landlord often has an as-built drawing showing which HVAC units serve which areas. It's the clearest evidence of common vs. tenant system boundaries.
A Common Pattern: Post-Renovation HVAC Misclassification
After a tenant improvement project or a building renovation, it's possible for HVAC equipment originally installed to serve a specific tenant's space to end up on the landlord's maintenance service contract and billed through CAM. The equipment might have been left behind by a prior tenant, and the landlord's service team simply added it to the maintenance schedule without tracking whose space it serves.
If your center recently had significant renovations or tenant turnover, HVAC charges worth examining include: service contracts that increased significantly in cost (additional equipment added), repairs for units in spaces that have been vacant (no tenant is paying separately), and units described on invoices by suite number rather than by common area location.
When In-Suite and Common Area Systems Share Infrastructure
In some configurations — notably enclosed malls and lifestyle centers — central plants serve both common areas and tenant spaces through shared distribution infrastructure. In this case, the HVAC operating cost may legitimately be CAM, but the allocation methodology matters.
If a central chiller plant services both common corridors and 30 tenant suites, the total operating cost should be allocated based on actual tonnage or BTU capacity served — not simply divided equally. If your lease addresses this, it may specify an allocation methodology. If it doesn't, the default is usually pro-rata share, but you can request the engineer's capacity schedule to verify the allocation is reasonable.
Start with Your Lease, Then the Invoices
The fastest verification path: read the HVAC maintenance responsibility provision in your lease, then request invoices for the HVAC-related lines in your reconciliation. If you find invoices for equipment inside your space, you have a clear basis for disputing those charges.
For a comprehensive review that flags HVAC misclassification alongside all other detection rules, upload your reconciliation and lease to CAMAudit.
Frequently Asked Questions
My lease says I'm responsible for my RTU. Can the landlord still bill me for it through CAM?
No. If your lease assigns responsibility for your rooftop unit to you as the tenant, the landlord can't pass the cost of maintaining that unit through the CAM pool. The landlord might be maintaining it under a building-wide service contract (for operational convenience), but that doesn't make it CAM.
What if my landlord's property manager says the HVAC is for a "shared" system?
Ask for documentation: the equipment identifier, location on the building systems map, and which spaces it serves. "Shared" is a description that can mean many things. You need the underlying evidence to verify whether the system is genuinely serving common areas.
Is HVAC in the parking garage part of CAM?
Ventilation systems in enclosed or below-grade parking structures are common area equipment and are typically legitimate CAM. If you're in a property with a parking garage, that ventilation cost is likely a real shared operating expense.
Can HVAC system replacement ever be CAM?
Like other equipment, HVAC system replacement is generally a capital expenditure. A new central plant or a rooftop unit replacement extends useful life significantly. Most leases exclude it unless the lease has a capital amortization carve-back for energy-efficiency upgrades. Verify your lease's capital exclusion language and whether the amortization carve-back applies.
What's the difference between an HVAC maintenance line and a utilities line for HVAC?
Maintenance covers the cost of servicing and repairing HVAC equipment. Utilities cover the cost of the electricity, gas, or chilled water used to operate HVAC systems. Both can appear in a reconciliation. The same common-vs.-tenant-space question applies to each: is the utility consumption for common area systems or for individual tenant spaces?
How do I know if the building has a central plant vs. independent tenant units?
Start with your lease's HVAC maintenance provision — it will typically describe whether you're responsible for an RTU serving your space or whether HVAC is provided from a central system. If it's unclear, ask the property manager for the mechanical systems description or look at the building's utility meter configuration (individual meters per tenant vs. one master meter).