Triple Net Lease


What is a 'Triple Net Lease'

A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name.

This type of lease can also be referred to as a "net-net-net lease" or a "hell or high water lease".

BREAKING DOWN 'Triple Net Lease'

For example, if a property owner leases out a building to a business using a triple net lease, the tenant will be responsible for paying the building's property taxes, building insurance and the cost of any maintenance or repairs the building may require during the term of the lease. Because the tenant is covering these costs (which would otherwise be the responsibility of the property owner), the rent charged in the triple net lease is generally lower than the rent charged in a standard lease agreement.

  1. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  2. Add-On Factor

    The number of usable square feet divided by the number of rentable ...
  3. Land

    Property or real estate, not including buildings or equipment, ...
  4. Lessee

    The person who rents land or property from a lessor. The lessee ...
  5. Expense

    1. The economic costs that a business incurs through its operations ...
  6. Lease

    A legal document outlining the terms under which one party agrees ...
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  1. What kinds of real estate transactions use triple net (NNN) leases?

    A net-net-net lease, also known as a triple net or NNN lease, is a type of real estate lease that requires the tenant to ... Read Full Answer >>
  2. How does the value of the real estate impact the value of a triple net (NNN) lease?

    The value of the real estate leased on a triple-net lease basis impacts the value of the lease in two opposing ways. It impacts ... Read Full Answer >>
  3. What are the three "nets" of an NNN lease?

    A triple net (NNN) lease is a type of real estate lease in which the tenant is responsible for paying the building's property ... Read Full Answer >>
  4. What are the differences between single, double and triple-net leases?

    A net lease is a real estate lease in which the tenant pays, on top of his rent, one or more of the following expenses: property ... Read Full Answer >>
  5. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
  6. Does renters insurance cover mold?

    An all-perils renters insurance policy typically provides a low set amount of coverage for damage caused by mold as long ... Read Full Answer >>

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