What’s Included in Common Area Maintenance (CAM)?

What Does Common Area Maintenance Cover?

CAM fees account for the money required to properly maintain, repair, insure, and manage the shared spaces and amenities of a condo, co-op, townhome, or other common interest development. This includes:

Common Area Facilities

The most fundamental aspect of CAM is caring for the community’s common areas and facilities. This includes:

• Landscaping – Maintaining lawns, trees, planting beds, etc.
• Pest control – Controlling rodents, insects, etc. on community grounds
• Snow removal – Clearing snow from walkways, roads, parking lots
• Cleaning – Janitorial services for lobbies, hallways, community rooms, etc.
• Trash removal – Collecting and disposing of community garbage
• Pool maintenance – Cleaning, repairs, supplies, and lifeguards for pool(s)
• Fitness room management – Equipment costs, cleaning, repairs for workout rooms
• Playground/park maintenance – Upkeep of outdoor recreational equipment and features
• Parking lot repairs – Sealing, re-striping, pothole repairs, etc. for community lots
• Building exteriors – Power washing, paint touch-ups, roof repairs for community structures
• Property management fees – Cover costs of overseeing maintenance, enforcement, etc.

Shared Utility Costs

The community common areas often have utility systems separate from individual units. The costs of these shared utilities are also covered by CAM fees, such as:

• Water and sewer for irrigating landscaping, supplying pools and clubhouses, etc.
• Electricity for exterior lighting, recreational facilities, lobbies, hallways, etc.
• Gas for heating or powering appliances in common areas
• Garbage collection fees
• Cable, phone, and internet for amenities like gyms, clubhouses, pools, etc.

Capital Improvements & Reserve Funds

In addition to regular upkeep, CAM fees help save for future major repairs and replacements through capital reserves. Capital improvements may include:

• Clubhouse renovations
• Pool resurfacing
• Roof replacement
• Siding repairs
• Parking lot overlay
• Playground equipment replacement
• Major landscaping upgrades

Setting aside stable reserve funds through CAM fees allows communities to budget for major projects and have funds on hand when upgrades are needed. This helps avoid special assessments or deferred maintenance when big-ticket projects arise.

Insurance Coverage

CAM also helps pay for insurance policies to protect the shared elements, including:

• Property/casualty for buildings, amenities, equipment
• Liability to cover injuries in common areas
• Directors and officers for board members
• Umbrella policy for extra liability
• Flood, earthquake, hurricane or other disaster insurance in some areas

Administrative Costs

The day-to-day administration of the community association is also paid through CAM fees. Administration costs may include:

• Management company fees
• Accounting fees
• Legal counsel retainer
• Office supplies/equipment
• Postage and printing
• Website hosting fees
• Bank charges
• Tax returns

Why Adequate CAM Funding Matters

Collecting sufficient CAM fees is crucial for properly maintaining shared community assets and providing amenities residents expect. Here’s why it’s important to adequately fund CAM:

• Preserves Asset Values – Keeping up with regular maintenance and repairs through CAM preserves the condition and extends the lifespan of association facilities. This supports property values community-wide.

• Avoids Special Assessments – Special assessments to pay for major unexpected repairs can cost thousands per owner. Regular CAM contributions to capital reserves helps avoid these ugly surprises.

• Provides Desired Amenities – Residents expect access to features like pools, fitness centers, trails, playgrounds, clubhouses, etc. Proper CAM funding keeps these amenities operating safely and reliably.

• Upholds Appearance – Well-maintained landscaping, fresh exterior paint, and pristine shared elements project a positive image and boost curb appeal, which helps attract buyers and residents.

• Promotes Safety  –Adequate CAM pays for important safety measures like exterior lighting, routine inspections, pest control, snow removal, alarm monitoring, etc.

• Covers Legal Obligations – CAM helps the association meet its duty to maintain common areas to standard. Insufficient funding can result in lawsuits, fines, and government intervention.

• Controls Future CAM Increases – Keeping up today avoids deferred repairs that balloon into major expenses later, resulting in sudden CAM spikes down the road.

How Much Should CAM Fees Be?

So how much should owners expect to pay in CAM fees? Common charges typically range from:

• Condos – $200 to $500 per month
• Townhomes – $100 to $300 per month
• Single-family HOAs – $50 to $200 per month

However, the appropriate budget depends on the association’s unique facilities and expenses. Things like shared walls versus detached homes, basic landscaping versus expansive grounds, a single pool versus multiple pools and playgrounds, high-rise versus garden-style, will all impact CAM contributions needed.

CAM fees are also influenced by:

• Location – Fees tend to be higher in areas with extreme weather, due to costs like snow removal and roof repairs.
• Property Age – An older community with aging systems will require more repairs, increasing CAM needs.
• Prior Maintenance – Deferred maintenance leads to higher costs down the road. Staying on top of repairs keeps CAM steadier.
• Amenities/Services – More amenities and services mean increased staffing, upkeep, utilities, and costs.
• Reserve Balance – A low capital reserve balance will necessitate larger contributions to bulk up savings for big projects.
• Inflation – Rising costs for materials, labor, utilities, etc. will drive CAM fees upward.
• Governing Documents – High reserves, ample services, and ideal aesthetics mandated in association declarations necessitate appropriately higher fees.

Overall, a prudent annual budget should be set based on the association’s needs and goals. The board then determines each owner’s share based on percentage or square footage owned.

Getting Professional Assistance with CAM Budgeting

Creating a comprehensive CAM budget requires an understanding of prior costs, future needs, inflation, and proper reserve levels. Professional managers offer experience creating accurate budgets that sufficiently fund maintenance and improvements without overcharging owners.

They provide services like:

• Reviewing past expenses and reserve studies
• Projecting future repair/replacement costs
• Advising on proper reserve levels
• Recommending maintenance schedules
• Providing comparable budget benchmarks
• Preparing detailed budgets for board review
• Tracking and explaining budget performance
• Suggesting cost-saving measures

This expertise helps boards establish prudent and defensible budgets year after year.

Tips for Controlling CAM Costs

While adequate CAM funding is essential, there are also ways associations can curb expenses through careful budgeting, oversight, and planning:

• Review Contracts – Seek competitive bids for items like landscape and pool maintenance to get the best rates.
• Prioritize Needs – Focus spending on essentials first and defer “wish list” items until funds allow.
• Practice Preventative Maintenance – Proactive upkeep prolongs lifespan of facilities and reduces major repairs.
• Inspect Work – Verify contractors complete work fully and appropriately to avoid paying for subpar services.
• DIY When Possible – Take on tasks like minor landscaping, painting, and administrative work internally to save on outsourcing.
• Build Reserves – Fund reserves appropriately now to avoid large special assessments later.
• Audit Annually – Review budget performance and service contracts to identify potential cost savings each year.
• Watch the Market – Take advantage of lower costs during off-peak seasons and periods of reduced demand.
• Review Staffing – Right-size staff and services based on the community’s current needs.
• Consider Self-Management – Weigh if professional management warrants the expense versus board self-management.
• Implement Tech Solutions – Automate and modernize processes to work more efficiently. Tech to Streamline Property Maintenance Workflow can optimize operations.
• Communicate Openly – Ensure financial transparency and explain budget decisions to garner owner support. Strategic Communication for Property Teams is key.

With careful budgeting and wise spending, associations can fulfill maintenance obligations while keeping fees reasonable.

Keeping a Well-Maintained Community

Common area maintenance fees, while often unpopular, provide the essential funding needed to properly care for shared assets and deliver desirable amenities. Understanding what CAM pays for and budgeting adequately gives communities the means to uphold their curb appeal, retain their home values, and operate safely and effectively for years to come.

Comprehensively planning and wisely spending CAM dollars is one of the most important duties of every association board. Property Maintenance Tips to Increase Value can help keep their communities looking beautiful while controlling costs. With professional assistance and vigilant oversight, associations can ensure their CAM program adequately serves their neighborhood for the long run.

Conclusion

If you are a property management company or real estate stakeholder looking for reliable property maintenance and repair services, Octo Property Services is here to assist you. With our expertise and dedication to quality, we can help you enhance the value of your properties. To learn more about our services and discuss your specific needs, please fill out the contact form on our website, and our team will be in touch with you promptly to provide the best common area maintenance solutions for your properties!