What Are Single, Double, and Triple Net Commercial Leases?
Background
When you sign a commercial lease, there are many different factors to consider. It’s not just about the rent that needs to be paid or how long the lease lasts. Both sides need to know what obligations they’ll have.
To this end, there are three different basic types of leases, which will be discussed below. This can help to give you a starting point, although each lease may have clauses and specific points that have to be addressed.
Table of Contents
Single Net Leases
A single net lease is one in which the landlord is responsible for insurance, repairs and maintenance. The tenant does have to pay for utilities, and they do have to cover property tax, but they’re not responsible for paying for repairs and upgrades to the property itself.
Double Net Leases
A double net lease shifts the obligation to pay for the insurance premiums over to the tenant. The landlord still has to make repairs and pay for maintenance, but they don’t have to cover that insurance policy.
Triple Net Leases
A triple net lease means that the tenant has to cover almost all of the costs that may be incurred by the building itself. This could include small repairs and upgrades. The landlord typically has to cover things like structural repairs, but most of the obligation lies with the tenant.
How To Choose Between the Two
All of these different types of leases have pros and cons. It’s important for both tenants and landlords to understand not only what the best lease is for their situation but what legal obligations they’re going to have. They also need to know how to draft these leases so that they will hold up from a legal standpoint.
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