What is a triple net or NNN lease?
A triple net or NNN lease provides that in addition to the base rental, the tenant pays all of the net property expenses incurred by the building owner. These expenses are property taxes, building insurance and maintenance. Since annual maintenance expenses cannot be determined until after the year or accounting period, these expenses are estimated and are paid monthly in addition to the base rental. At the end of the year or accounting period, all of the net expenses are combined, and the tenant is given a credit for monies paid, or invoiced the difference if the expenses exceed the collected amount.
