What is CAM Cap?

Definition

A CAM cap limits the annual increase in controllable operating expenses a landlord can pass through to tenants, expressed as a percentage of the prior year's charges. Caps may be cumulative (unused cap allowance carries forward to future years) or non-cumulative (unused cap is forfeited each year). Non-cumulative caps strongly favor landlords because a single year of low expenses does not create a larger allowance in subsequent years. Failing to apply caps correctly — or misclassifying non-controllable expenses as controllable to circumvent the cap — is a common dispute trigger in tenant audits.