Legal Definitions - net rent

Net rent refers to the base amount of rent a tenant pays for the use of a property, *excluding* any additional costs or expenses that the tenant might also be responsible for under the lease agreement. These additional costs often include items such as property taxes, building insurance, utilities, or maintenance fees. Essentially, net rent is the pure payment for the space itself, separate from other operational expenses associated with the property.

Here are some examples to illustrate this concept:

• Commercial Office Lease: A small marketing firm leases an office space in a multi-tenant building. Their lease agreement specifies a monthly payment of $3,000 for the space. In addition to this, the firm is separately billed for its proportionate share of the building's property taxes, insurance, and common area maintenance (CAM) charges. In this scenario, the $3,000 is the net rent, representing the cost solely for occupying the office space, before the additional operational expenses are factored in.

• Retail Storefront (Triple Net Lease): A new boutique clothing store signs a "triple net" (NNN) lease for a storefront in a shopping center. The lease states a monthly rent of $8,000. Under the terms of a triple net lease, the store is also responsible for paying all property taxes, building insurance premiums, and maintenance costs directly related to their unit. The $8,000 is the net rent, as it is the base payment for the space, separate from the significant additional costs the tenant bears.

• Industrial Warehouse Rental: A logistics company leases a large industrial warehouse for its operations. The lease agreement stipulates a monthly payment of $15,000 for the use of the warehouse building. The company is also responsible for paying its own utility bills (electricity, water, gas) and for all interior repairs and general upkeep of the leased premises. The $15,000 constitutes the net rent, representing the fundamental cost of renting the warehouse space before the company's operational expenses for utilities and maintenance are added.