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CAM Charges Cannot Include Landlord's LLC's Expenses

Tha't's it in a nutshell:  common area maintenance charges in a lease that restricts the CAM charges to related to the repair, maintenance, and operation of the land prohibits the company from passing along the corporate costs to its tenants. 

The court of appeal in the case Tin Tin Corporation v. Pacific Rim Park, LLC decided the landlord, PRP, could not charge the tenant, TTC, the fees and taxes PRP incurred from conducting business in the form of a limited liability company.  The court reasoned that those costs were not related to the ownership and operation of the premises. 

The LLC protected PRP by shielding it from liability.  In contrast, the common area operational expenses benefitted the tenants and were chargeable to the tenants., but the cost PRP incurred to protect itself weren't.

Key lesson:  don't overreach. 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, February 03, 2009 at 21:47 Comments Closed (0) |
 
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