What Is A Triple Net Lease ?
The triple net lease is the most popular lease when it comes to commercial property, especially with industrial properties with more than one tenant and retail properties. In such properties the utility use can vary quite a bit, and it more beneficial for the landlord to go in for a triple net lease. |
Sponsored Links :
|
In a triple net lease, the tenant is solely responsible for paying the property taxes, insurance and maintenance cost besides paying rent to the landlord. As the name suggests, these expenses are deducted from the rental amount. So, what the landlord actually receives is net amount, which is just the rent amount. All expense-related payments are made directly by the tenant.
A triple net lease is beneficial for the landlord as well as the tenant. A landlord reduces the burden of out-of-pocket expenses as these expenses are passed on to the tenant. And, since the landlord does not have bear expenses for paying for taxes, maintenance and insurance, he can afford to give the commercial property as a lower rental. The tenant, in turn, has control over the property.
However, a triple net lease is not without its risks. For instance, a tenant may not have the financial means to oversee some types of repair. In which case, the tenant may not inform the landlord of the same, and would end up leaving the building in a state of disrepair. The tenant too can suffer when it comes to paying of taxes if the business is not performing well. He will not be able to claim amount spent on paying the expenses as part of his business loss.
More Articles :
|
