Pass Through Off-Site Traffic Improvement Costs to Tenants

Most shopping center owners provide off-site traffic improvements—such as special signage and lighting in areas leading to the center—to their tenants. These improvements benefit both owners and tenants because they help increase customer traffic, which means more sales at the center. And these improvements may also help control the flow of vehicles into and out of the center, reducing the risk of accidents.

If you plan to make off-site traffic improvements, you'll want to pass through the cost of installing, maintaining, and repairing them to your tenants. But a typical lease may not allow you to do this.

Instead of getting left with a potentially hefty bill, add language to the CAM cost clause to pass through to the tenant these off-site traffic improvement costs. You can do this by making sure that the list of CAM cost items in the lease includes all costs associated with off-site traffic improvements that you have made, says Toronto solicitor Harvey M. Haber.

To pass these costs through to the tenant, Haber suggests that you include Model Language like this in your CAM cost list. Show this language to your attorney before adding it to your lease.

Model Language

All costs associated with those improvements, systems, signage, equipment, and installations that are designated by Landlord to serve or benefit the Center by facilitating the flow of traffic into or out of the Center, whether or not located within, adjacent to, or near the Center.

Insider Source

Harvey M. Haber, Q.C.: Partner, Goldman Sloan Nash and Haber LLP, 480 University Ave., Ste. 1600, Toronto, Ontario M5G 1V2; (416) 597-3392; haber@gsnh.com.

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