Legal Question in Real Estate Law in California

Our company moved to a commercial building 3 years ago. Original lease was signed with a particular management company. Last year, we received a notice saying that management company has been changed, and new managment company started sending out billing with a dramatic increase on CAM charges claiming that previous management company did not charge correctly for the space that we were renting. And, now, they are saying that building is under new ownership, and we are to pay 2012 reconciliation charge in the amount of $20,000 by Sept. 1.

Is this legal?

What can we do to stop this?


Asked on 8/27/13, 9:59 am

3 Answers from Attorneys

William Christian Rodi Pollock

These issues are generally governed by the terms of your lease. Start by reviewing carefully what the underlying documents say as to calculating pass through charges, audit of the charges and ability to change . You should seek advice from a real estate attorney who is provided access to your lease and all cam charge notices.

If they are correct in their adjustments, you may be able to discuss the adjustments with the landlord and either revise them appropriately or work out a deferred payment plan. First step is to verify the passthrough calculations and the lease terms to determine if thay are correct. You do not state in your question what the adjustments relate to. You may also want counsel to describe to you what the sale of the building may do to your real estate tax passthrough if it has caused a change of ownership. This also will be governed by your lease. This gratuitous response does not create an attorney client relationship. The advice provided herein is generic, may not apply to your circumstances and is not to be relied upon in your actions. An attorney client relationship is created only upon execution of an engagement letter hiring me or my firm.

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Answered on 8/27/13, 10:16 am
Joel Selik www.SelikLaw.com

Subject to what your lease provisions, these kind of increases can be lawful. You can usually have the most success and finding any violations of the lease, and then "fine-tooth combing" the CAM charges to find overreaching.

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Answered on 8/27/13, 10:28 am
Terry A. Nelson Nelson & Lawless

Your commercial lease will describe what can and can not be done upon change of ownership. If it doesn't, then it is open to interpretation under 'common law' theory, which should protect you from changes in any terms other than provided for in the lease. Meaning, your rent would continue the same as if no ownership change occurred. If you need to review it for explanation and opinion of counsel, feel free to contact me to arrange.

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Answered on 8/27/13, 2:17 pm


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