Property Management

Net Lease

A lease in which the tenant pays base rent plus some or all property operating expenses.


Definition

In a net lease, the tenant pays a base rent plus one or more categories of property expenses. A single net lease (N) requires the tenant to pay rent plus property taxes. A double net lease (NN) adds insurance. A triple net lease (NNN) requires the tenant to pay rent plus taxes, insurance, and maintenance. The landlord receives 'net' rent with no deductions. Triple net leases are common in commercial real estate, particularly for single-tenant retail properties.

Exam Tip

Net = tenant pays taxes. Double net = taxes + insurance. Triple net (NNN) = taxes + insurance + maintenance. The more 'nets,' the fewer expenses the landlord pays.

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