Triple net lease

A triple net lease is a leasing arrangement in which the tenant or lessee is responsible for paying all of the costs associated with a leased asset. For example, the tenant in a leased property is required to pay the rent, insurance, maintenance, and property taxes. When there are multiple lessees in a property, a tenant must also pay its share of the maintenance on common areas, usually based on a proportion of square footage leased. This approach to leasing shifts the risk of incurring cost increases onto the tenant or lessee. When a regular leasing arrangement is used, the lessor is responsible for these additional costs, and so will charge a higher lease rate in order to be compensated for the extra costs.

Related Courses

Accounting for Leases