What is a “Triple Net Lease” NNN or “Net Lease” and how is it used?
A triple net lease (most commonly used) or net lease requires the tenant to pay some or all of the property expenses which normally would be paid by the property owner who is also known as the “Landlord”. The tenant would also pay fixed rent as well as all or some of the expenses. These expenses can include taxes, insurance, maintenance, repairs, utilities and other items predetermined when lease is signed. The exact items that are to be paid by the tenant are usually specified in the written lease before the lease is effective. In certain properties (that are leased by more than one tenant) such as a strip mall, the lease expenses that are “passed along” to the tenants are usually prorated to the tenants based on the size or square footage of the area occupied by that individual tenant. The actual term “Net Lease” must not be confused with the term “Gross Lease”. In a “Triple net lease” the property owner will receive the rent “totally net” after the expenses passed through to tenants