What Is a Net Lease?
A net lease is a lease where the tenant has primary control of the premises and agrees to be responsible for some or all of the operating expenses of the premises, such as utilities, repairs, insurance, or taxes. A tenant who has a net lease is responsible for paying the monthly lump sum base rent as well as some or all of the operating expenses.
Types of Net Leases
Net leases define the responsibilities of the landlord and the tenant differently. The following are types of net leases: - Single Net Lease ¿ A single net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes. The landlord is responsible for all other operating expenses of the premises.
- Double Net Lease (NN) ¿ A double net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes and the property insurance. The landlord is responsible for all other operating expenses of the premises.
- Triple Net Lease (NNN) ¿ A Triple net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes, the property insurance, and the maintenance. Under a triple net lease there are a few legal defenses which may relieve a tenant of his responsibilities. For example, a triple net lease may relieve the tenant of his responsibility if the property is subject to an eminent domain proceeding.
- Absolute Triple Net Lease (Bond Lease) ¿ An absolute triple net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes, the property insurance, and the maintenance. Under an absolute triple net lease there are no legal defenses if a tenant fails to meet his responsibilities.
Do I Need a Real Estate Attorney before Signing My Commercial Lease? Commercial leases are very complex agreements with every provision open for negotiation. A real estate attorney will be able to inform you of whether a gross lease, a net lease, or some type of hybrid is best for your business needs. A real estate attorney will also protect your interests when negotiating your commercial lease to ensure that the lease is the best lease possible for your business needs. |
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