19 Dec 2020

Triple Net Lease Agreement Definition

Post by Mobile Design Guy

Most triple net leases are long-term leases that last more than 10 years and generally include concessions for rent increases. They are also called net-net-net or NNN-Leasing in the real estate sector. (For proper reading see: What types of properties use Triple Net (NNN) leases?) By representing these expenses to the tenant, the landlord and his investors know exactly how much income they can expect each month. And because these leases are usually signed for long initial periods and rent increases are planned, landlords don`t have to worry so much about rent renewals or negotiating rent adjustments. The triple net lease frees the lessor from the greatest net rental risk. This means that in addition to rent, property taxes and insurance premiums, maintenance and repair costs must also be borne by the tenant. As these additional costs are passed on to the tenant, the landlord usually calculates a lower base rent. Many people will use the term Triple Net Lease, even if a contract is not specifically a Triple Net Lease, easy to describe. In this way, individuals and commercial parties may misunderstate the intent of a lease agreement at the time the contract is signed. Like net individual rentals, homeowners should have given them the additional payments so that they can pay them to the municipality and the insurance. Even if the tenant`s tenancy agreement includes these payments, the landlord`s name appears on the tax and insurance bill, which means that he is ultimately responsible for it. By charging these fees directly from the tenant, the landlord can avoid problems related to late or missed payments from tenants, which could result in additional costs.

To make the best decisions for your organization, TenantBase has put together some thoughts on a net triple leasing. When choosing between rental types and not necessarily what is fashionable in commercial office spaces at this time, consider your own specific goals and expectations. TenantBase is here to accompany you by giving you our know-how and experience to your office needs. A triple net lease is a type of lease that designates the tenant (Lessen) as solely responsible for all costs related to the assets leased in the agreement. This agreement is related to the rental fees collected under the lease. Under this legal agreement, the tenant is required to pay net property tax on leased assets, net real estate insurance and net maintenance of common areas. As a general rule, properties where landlords use triple net leases (NNNs) are “equity investments” and not “cash flows.”