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Business Wins Challenge of CAM Charges

Posted: February 17, 2008 1:06 a.m.
Updated: April 19, 2008 5:02 a.m.
 
They're known as "common area maintenance" charges, or CAM charges for short.

They're paid by tenants of commercial property, somewhat like condomium owners pay association fees.

And for the owners of at least one business that used to be located in Valencia, they were worth going to court over.

After a series of court hearings and appeals, the California 2nd Appellate District Court decided last month that unless otherwise specified in the lease agreement, the owners of A+ Teaching Supplies had the right to view statements regarding CAM charges where their business was located.

Russ and Kelly Furie have since moved A+ Teaching out of the Valencia commercial site to a Canyon Country location.

The furor was over CAM charges that increased without any justification, said Russ Furie.

Overcharged?
Small business owners since 2001, the Furies say they saw explanations for increased charges at previous locations.

"At Simi Valley, we got a whole stack of bills with the charges," Furie said.

But when they opened A+ Teaching Supplies at Octagon Plaza in Valencia in 2003, such was not the case, the Furies said.

Ted Charanian, co-owner of Octagon Plaza, said that the fees varied depending on the necessary upkeep and charges for the property that year. While he handled the charges himself, he said that he followed what he considers to be "common industry practices."

Charanian also points out that common area maintenance is better referred to as taxes, insurance and maintenance charges than fees, as these terms offer a better explanation of the charges.

Charanian also maintains that he never objected to the access of maintenance records, but over hiring a third-party auditor to examine the records.

J. Steven Kennedy, lawyer for Charanian and his wife, said that the Furies were never able to prove in court that they were overcharged with any of the expenses, although the Furies estimate they overpaid some $1,000 to $1,500.

Kennedy said his clients provided the Furies with tables and spreadsheets of the charges that included checks and other information involving the charges.

Joseph Brown, who has represented the Furies since 2005, said he feels the courtroom triumph is for any future tenants that will come across problems similar to the Furies'.

"It clarifies the law on this issue," Brown said about the ability to access CAM records.

Additionally, Brown said the ruling aids small business and "mom and pop stores" that do not have much bargaining power as other, larger tenants might.

"It levels the playing field a little bit," he said. "Where very often there is an unequal level of bargaining power between the landlord and a small tenant."

The Furies, who said that it wasn't a matter of the landlord being honest, but about accessing the records, also see the decision as a way to increase transparency in a contract.

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