Triple Net Real Property Lease

What is Triple Net Real Property Lease?

A Triple Net Real Property Lease, also known as NNN lease, is a lease agreement in which the tenant is responsible for paying not only the base rent but also the property taxes, insurance, and maintenance costs associated with the property. This type of lease transfers the financial burden of these expenses from the landlord to the tenant, making it an attractive option for property owners.

What are the types of Triple Net Real Property Lease?

There are three main types of Triple Net Real Property Leases:

Single Net Lease: In this type of lease, the tenant is responsible for paying only the property taxes. The landlord covers all other expenses such as insurance and maintenance costs.
Double Net Lease: In a Double Net Lease, the tenant is responsible for paying both property taxes and insurance. The landlord is responsible for the maintenance costs.
Triple Net Lease: This is the most comprehensive type of Triple Net Lease. The tenant is responsible for paying all three expenses: property taxes, insurance, and maintenance costs.

How to complete Triple Net Real Property Lease

Completing a Triple Net Real Property Lease involves several steps to ensure a smooth process. Here is a step-by-step guide:

01
Understand the terms: Familiarize yourself with the terms of the lease agreement, including the rent amount, the duration of the lease, and the responsibilities of both the landlord and the tenant.
02
Negotiate the terms: If there are any clauses or terms that you are not comfortable with, negotiate with the landlord to reach a mutually beneficial agreement.
03
Review the lease agreement: Carefully review the lease agreement to ensure that all the necessary details are included and accurately stated.
04
Seek legal advice: It is always recommended to consult with a real estate attorney to review the lease agreement and ensure that your rights and interests are protected.
05
Sign the lease agreement: Once everything is in order, sign the lease agreement and ensure that all parties involved receive a copy for their records.

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Questions & answers

In a triple net lease, op/ex consists of three main elements: property taxes, insurance, and common area maintenance (CAM) fees. In a triple net lease, your annual rental obligation, called gross rent, will be your base rental rate plus operating expenses.
A triple net lease (triple-net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
A triple net lease (triple-net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
Avison Young says that NNN leases are one of the most secure investment opportunities. With this type of investment, you will always have a steady income coming in with very little responsibility and risk.
Cons of Triple Net Leases For landlords who are locked into a long-term lease, they lose the ability to increase the rent if property values in the area increase. In the long-term, this can limit earning potential.
Calculating a Triple Net Lease Triple net leases are calculated by adding the yearly taxes on the property and the insurance for the space together and dividing that amount by the building total rental square footage.