What is a Triple Net Lease?
The terms Triple Net Lease, Triple Net Leased, Triple-Net, NNN, Net Lease, Net-Net-Net are interchangeable. The definition of a Triple Net Lease (NNN) requires the tenant to pay all insurance, maintenance, and taxes. The tenant is responsible for all normal expenses of ownership, leaving the owner free of day-to-day management responsibility.
Most common with today’s commercial properties, the Triple Net Lease,also known as a net lease, directs the tenant to pay the landlord a Base Rent which is net of property expenses, PLUS an additional amount for tenant’s share of the property’s expenses such as property taxes, insurance, common area maintenance (C.A.M.), management, etc.
A triple net lease is a type of commercial leasing agreement. In a triple net lease, the lessee pays taxes, insurance, and maintenance in addition to the rent. There are advantages and disadvantages to a triple net lease for both parties. Individuals considering a triple net lease should research carefully before making a decision. The length of a triple net lease can vary, but many leases last for at least 50 years. A triple net lease is only one of many commercial leasing options. In a gross lease, the lessee pays rent while the landlord takes care of everything else. Most people who rent their homes are familiar with the terms of a gross lease, as this type of lease is commonly used for residential properties. In a double net lease, the landlord assumes some of the costs of property upkeep. In a double net lease, landlords commonly cover parking, heating and cooling systems, and the structural integrity of the building. The triple net lease is sometimes called a true net lease, beca
Commercial properties, like residential properties, have a lease that details how much the tenant or lessee will pay in rent, how long the tenant has to rent the property, the rights and privileges of the tenant, payments for taxes, insurance, and maintenance (also known as the “nets”), and rent increases. When the lease agreement requires the tenant to pay taxes, insurance, and maintenance in addition to the rent, it’s known as a triple net lease. A triple net lease might also be called a net-net-net lease or an NNN lease. Types of Leases Generally, there are a few different types of leases: The gross lease, the landlord pays the cost of operating the property and sets the rent at a price that’s above the operating expense. The modified gross lease, the landlord passes some of the operating costs, like utilities, to the tenant. The single net lease, the tenant pays the property taxes and the rent. The landlord pays the other operating costs. The double net lease, the tenant pays the t
In commercial leases, this term means that in addition to rent, the tenant must pay all expenses for the use and operation of the property, including all taxes, utilities, maintenance and insurance charges. A “gross” lease is one where the landlord is obligated to pay such expenses. The law firm of Baillie & Hershman, P.C. is in touch with the issues and laws shaping today’s competitive and rapidly changing business climate. Speak to any of our attorneys and find out why people throughout Connecticut turn to us to help realize their business goals.
