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.

RELATED TERMS
  1. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  2. Modified Gross Lease

    A type of real estate rental agreement where the tenant pays ...
  3. Lease

    A legal document outlining the terms under which one party agrees ...
  4. Ground Lease

    An agreement in which a tenant is permitted to develop a piece ...
  5. Rent Guarantee Insurance

    Insurance bought by a tenant that pays the monthly rent for a ...
  6. Tenancy At Sufferance

    An agreement in which a property renter is permitted to live ...
Related Articles
  1. Investing

    Buying a House with Tenants: A Quick Guide

    Before buying a house with tenants, know the risks and responsibilities you're taking on.
  2. Investing

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  3. Managing Wealth

    11 Mistakes Inexperienced Landlords Make

    Avoid these pitfalls if you considering purchasing a rental property.
  4. Investing

    How To Rent Out Your Spare Room

    If you have extra space in your house, why not rent it out, especially during the school term, to help pay the mortgage?
  5. Managing Wealth

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  6. Investing

    Top 4 Nightmares For Real Estate Investors

    Renting out your property is not without risks; the good news is, they don't have to keep you up at night.
  7. Managing Wealth

    4 Things Landlords Aren't Allowed To Do

    Whether you're a landlord or a tenant, you need to know the rules.
  8. Investing

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
RELATED FAQS
  1. What are the three "nets" of an NNN lease?

    Learn what the three "nets" are in an NNN lease and how they affect the responsibilities of both landlord and tenant in a ... Read Answer >>
  2. What kinds of real estate transactions use triple net (NNN) leases?

    Learn how a net-net-net or triple net lease works and why it is popular in commercial real estate transactions. It is also ... Read Answer >>
Hot Definitions
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  2. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  3. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  4. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  5. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  6. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
Trading Center