What is a Triple-Net Lease?
A triple-net lease (NNN lease) is a type of commercial lease agreement in which the tenant is responsible for paying all of the operating expenses associated with the leased property, in addition to the base rent. Operating expenses may include property taxes, insurance, and maintenance costs.
In a triple-net lease, the landlord is generally only responsible for maintaining the structural integrity of the building and any common areas. The tenant is responsible for the upkeep and maintenance of their leased space and for paying a pro-rata share of the operating expenses based on the size of their space.
Triple-net leases are often used for properties such as retail stores, restaurants, and office buildings, where the tenant is responsible for the day-to-day operation of the property. They can provide landlords with a stable and predictable stream of income, as the tenant is responsible for paying all of the operating expenses. However, they can also be riskier for tenants, as they are responsible for a greater share of the operating expenses and may have less control over the property. The terms of a triple-net lease should be clearly outlined in the lease agreement.
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