Single vs Double vs Triple Net Leases
With a net lease, the tenant is responsible to pay, in addition to rent, some or all of the property expenses that normally would be paid by the landlord. These include expenses such as property taxes, insurance, maintenance, repair, operations, utilities, and other items. These expenses can be grouped under the “three nets”: property taxes, insurance, and maintenance.
Single Net Lease
A single net lease is not common as there is minimal risk to the tenant who pays for property taxes over and above the rent. By including property taxes with the rent, landlords can ensure that taxes are paid on time and in the correct amount. The three nets, as well as utilities, are paid by the landlord as well as any repairs to the property.
Double Net Lease
With a double net lease, the tenant is responsible for property tax and building insurance. The landlord is responsible for any expenses incurred for structural repairs and common area maintenance.
Triple Net Lease
A triple net lease is a lease agreement on a property where the tenant pays for all the property taxes, building insurance, and maintenance on the property in addition to the regular expenses such as rent, utilities, taxes and insurance. With a triple-net lease, the tenant is responsible for all costs associated with the repair and maintenance of any common area. This lease means almost all risk is transferred to the tenant. With nearly all the additional expenses passed on to the tenant, the landlord will generally charge a lower base rental. Triple net leases are generally used when the lease period is long-term.