A lease structure where the tenant pays base rent plus some portion of property operating expenses. The term "net" indicates expenses are passed through to the tenant on top of (net of) the base rent.
Net leases shift varying degrees of operating expense responsibility from landlord to tenant. In a single net (N) lease, the tenant pays base rent plus property taxes. In a double net (NN) lease, the tenant adds insurance. In a triple net (NNN) lease, the tenant pays taxes, insurance, and maintenance. The "net" refers to the landlord receiving rent net of these expense obligations. Net leases are priced with lower base rents than gross leases because the tenant bears the expense variability. The specific expenses included depend entirely on the lease language, not the label.
A landlord markets a space as a "net lease" without specifying which expenses are passed through. The tenant assumes it is a single net lease covering only taxes but discovers at reconciliation that maintenance and insurance are also being billed.
Never rely on the lease label (net, double net, triple net) to understand your obligations. Read the expense pass-through provisions in detail. The label is a marketing term; the lease language is the binding contract.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
