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Simple English definitions for legal terms
triple net lease
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A quick definition of triple net lease:
A triple net lease is a type of commercial lease where the person renting the property pays for more than just the rent and utilities. They also have to pay for things like insurance, maintenance, and taxes. This type of lease is popular with investors because they have less responsibility for the property and less risk. The person renting the property benefits because their rent is usually lower and they can make changes to the property. However, they also have to pay for unexpected maintenance costs and tax increases unless they agree to a limit. Triple net leases are usually long-term, lasting 10 or 15 years or even longer.
A more thorough explanation:
A triple net lease (NNN) is a type of commercial lease where the tenant is responsible for paying rent, utilities, insurance, maintenance, and taxes. This type of lease is popular among investors because it reduces their financial and managerial responsibilities over the property, and the tenant covers most of the cost fluctuations. The tenant benefits from a lower rent and more freedom to renovate or alter the property.
For example, a business owner may lease a commercial property under a triple net lease agreement. The owner would be responsible for paying rent, utilities, insurance, maintenance, and taxes. If the property requires repairs or maintenance, the owner would be responsible for covering those costs. However, the owner would benefit from a lower rent and more control over the property.
Triple net leases are generally long-term, with the most common lengths being 10 or 15 years. However, they can last much longer. It is important to note that the tenant may be responsible for unforeseen maintenance costs and tax increases unless there is a cap on the amount they are responsible for.