Double Net Lease


DEFINITION of 'Double Net Lease'

An agreement in which the tenant is responsible for both property taxes and premiums for insuring the building. Unlike a single net lease, which only requires the tenant to pay property taxes, a double net lease passes more expenses along in the form of insurance payments. The landlord is still held responsible for structural maintenance expenses. Each month, the landlord receives the base rent plus the additional payments. Double net leases are most commonly found in commercial real estate.

BREAKING DOWN 'Double Net Lease'

For commercial properties with multiple tenants, such as a shopping mall, taxes and insurance fees may be assigned to the individual tenants on a proportional basis. Even if property taxes and building insurance premiums are considered the responsibility of the tenant, owners of commercial property should have property taxes passed through themselves in order to ensure that they are aware of payment issues.

  1. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  2. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  3. True Lease

    A specific type of multi-year lease which does not pass on ownership ...
  4. Lease

    A legal document outlining the terms under which one party agrees ...
  5. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
  6. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
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