What is a NNN Lease?
A triple net lease (NNN lease) is a type of commercial lease agreement where the tenant is responsible for paying not only the base rent but also the property’s operating expenses, including property taxes, insurance, and maintenance costs.
Under a NNN lease, the tenant takes on more responsibilities and costs than in a standard lease agreement, where the landlord typically covers these expenses. In a NNN lease, the tenant is responsible for maintaining the property, paying for repairs and maintenance, and covering any increases in property taxes or insurance premiums.
The benefit of a NNN lease for the landlord is that they can shift some of the costs and responsibilities of owning and maintaining the property to the tenant. This can make the lease more attractive to landlords because they can avoid having to budget for and cover these costs themselves.
For tenants, a NNN lease can provide more control over the property and the ability to manage costs more closely. However, it also means that the tenant is responsible for unforeseen expenses, which can be significant if the property requires major repairs or improvements. Therefore, it’s important to carefully consider the terms of a NNN lease before signing and to work with a real estate attorney or professional to ensure that the terms are fair and reasonable.
