In a single net lease, tenant pays their share of property tax.
In a double net lease, tenant pays their share of property tax AND property insurance.
In a triple net lease, tenant pays their share of property tax, property insurance, and common area maintenance.
Do I have that right?
In the U.S. most commercial leases are "triple net" leases. This means that the tenant pays pro rata charges for landlord's taxes, insurance and common area maintenance or operating expenses for the building, shopping center or mall.. There are many concerns about what are included and excluded from these charges, for example, are taxes on rents able to be passed through to all tenants? Are capital expenditures proper to be included in the passed through operating expenses? These should be negotiated. The charges in a triple net are not the tenant's specific charges for his/her/it space, but rather the tenant's proportional charge for the landlord's expenses for taxes, insurance and maintenance of the building, shopping center or mall.
As far as single net and double net, these are not terms that frequently used. Single net does relate to property taxes, typically and double would most often relate property tax and property insurance. In my experience, seeing leases using the terms single and double net is not common.
Leases are highly complex, highly negotiable documents that can impact the bottom line of your business. You should consult an attorney experienced in negotiating commercial leases for assistance before you sign the lease.
This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.
Hi there, what is more important than these terms is that the lease that you ultimately sign reflects your understanding of the agreement. That said, please work with a local attorney familiar with how courts will treat a commercial lease should it be breached in some way so that you know what you're getting into (like, accelerated rent and likelihood of a huge judgment) and that you sign something that reflects your understanding. Use the Find a Lawyer tool on this site to locate someone near you/the property. Good luck!
Answer given for general advice and is not a legal opinion, which would require an analysis of the facts and circumstances as well as the applicable law and regulations.
True commercial real estate professionals do not use those expressions. Despite their continued use they are meaningless. Relying on them without understanding the lease is a recipe for disaster.
Context is extremely important. For example, in some market segments, "net lease" can mean tenant is responsible for maintaining and replacing the entire building they occupy.
The only meaningful distinction is gross vs net. Under a gross lease, tenant pays one lump sum that covers everything except utilities. What net lease means depends on the specific lease provisions.
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