What is a Triple Net Lease?
Triple Net Lease definition: The renter is accountable for their proportionate portion of property taxes, insurance, shared operating expenses and shared area utilities. Renters are additionally liable for all expenses connected with their own occupancy including personal property taxes, janitorial services and all utility payments.
If tenant’s premises are a portion of a larger property, the common area maintenance charges (CAMS) will be segmented amongst the renters of the building, usually based upon the renter’s square footage percentage of the total complex. Normally, the property owner will be accountable for the structural integrity of the building.
NNN Definition Types:
Net leases determine the obligations of both the owner and the lessee. Below are the net lease definition phrases which are most prevalent:
- Single Net Lease Definition – Lessee accepts to pay a monthly base rent and agrees to pay the property taxes. The owner is accountable for all other operating expenditures of the property.
- Double Net Lease (NN) Definition – Lessee consents to pay a monthly base rent, property taxes and property insurance. The owner is accountable for all other operating expenditures of the property.
- Triple Net Lease (NNN) Definition – Lessee consents to pay a monthly base rent, property taxes, the property insurance, and the maintenance. In a triple net lease, there may be several legal protective clauses which could release a lessee of his obligations. For instance, a triple net lease may release the lessee of his accountability if the property is subject to an eminent domain procedure.