Lease Audit Information


Food Courts:

In shopping centers with a Food Court there are many expenses involved in the operation and maintenance of that Food Court - expenses that would not normally be incurred in the operation and maintenance of the common areas of the shopping center. These expenses include: purchasing and maintaining Food Court furniture, busing trays, cleaning tables, staffing additional security, maintaining additional insurance, etc. Unless your lease specifically states that you must share in these additional expenses, non-Food Court tenants should not subsidize the costs required by the operation of the Food Court. Only the Food Court Tenants benefit from these costs.

The Food Court is designed as a "profit center" for the Landlord. The Landlord is the only one to really benefit monetarily from the addition of the Food Court by receiving substantially higher minimum rents from the Food Court tenants. The Food Court tenants are willing to pay higher minimum rents, because they do not have to incur the additional expense of maintaining a seating area. In return for the higher rents, one would assume that the Landlord would be responsible for the maintenance of the Food Court. However, the Landlord usually includes these expenses in CAM, thereby forcing the in-line tenants to subsidize the Food Court.

When the "Food Court" concept was originally conceived, the standard practice was to simply charge the Food Court tenants an additional charge for the maintenance and operation of the Food Court. (Some Landlords still adhere to this practice.) The Food Court tenants did not object to the additional charge, because they did not have to incur the added expense of maintaining a seating area and their pro-rata share of the regular common area costs was insignificant. However, when Landlords realized that they could make an additional profit by 1) including these costs in regular CAM, 2) dropping the additional Food Court maintenance charge and 3) increasing the Food Court tenant minimum rent, this became the standard practice.

Landlords will argue that the Food Court is a part of the Common Areas of the shopping center and as such these costs must be included in the CAM billings. This may be the case. In certain centers Food Courts are simply tables and chairs thrown into the common corridor. It is a stretch to really consider these seating areas as "Food Courts", and the additional costs relating to these seating areas is minimal.

However, you have a strong argument that Food Courts are not "common areas" when the Food Court is a "cul de sac" or a defined area of the center. (See plans below.) These areas are clearly not for the "common use and benefit" of all tenants and their customers. If the Landlord intended to include the significant expense of maintaining and operating this area in CAM, this should have been clearly identified in the lease so both parties would have full disclosure during negotiations. Also, if the Food Court was added to the center after your lease was signed, it would be impossible for you to negotiate whether or not you would agree to subsidize the Food Court tenants.


Great Northern Mall, Syracuse, NY

Crabtree Valley Mall, Raleigh, NC

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