What does a triple net lease agreement cost? If you require a commercial lease agreement, you may ask this question. Let’s explore this question and review general information about triple net lease agreements and other commercial leases.
How Much Does a Triple Net Lease Agreement Cost?
A triple net lease agreement, sometimes shortened to “triple-net” or “NNN,” is just one type of commercial lease agreement. In this agreement, the tenant, or person renting the commercial space, is responsible for paying all expenses associated with the property. This includes but is not limited to:
- Real estate taxes
- Building insurance
- Maintenance
- Utilities
These expenses must be paid in addition to the agreed-upon monthly rent. Generally, the additional expenses are considered when setting the rent price, and it isn’t uncommon for a triple net lease to have a lower monthly rent rate.
When a tenant and property owner agree to and sign a triple net lease agreement, the tenant essentially assumes all the expenses and responsibilities of the property owner. For this reason, ensuring that the triple net lease agreement is correctly drafted is very important.
Many property owners who use a triple net lease agreement opt to have a real estate lawyer draft the contract to ensure that it contains all necessary terms, protects both parties and is legally binding.
Additionally, tenants who are faced with signing a triple net lease agreement often like to have their own lawyer review the contract. Contracts are generally written to favor the drafting party, so a tenant needs to have a lawyer on their side to ensure the agreement is fair.
Based on ContractsCounsel’s marketplace data, the average triple net lease agreement cost is $700 across all states.
What is Included in a Triple Net Lease Agreement?
The terms and conditions in a triple net lease agreement will vary based on the property type and the needs of both the property owner and the tenant. These contracts are negotiable, so they are easy to customize to ensure both parties get a fair deal.
A standard triple net lease agreement should contain the following information:
- Parties: The parties to the contract are the landlord and the tenant. These can be individuals or business entities.
- Property Address: The address of the space that is being leased must be included.
- Property Description: The property description includes square footage and any areas included in the lease, like parking.
- Property Use: The use clause dictates how a tenant can use the property. It will include information about the tenant’s business and manner of operation.
- Lease Term: The duration of the lease, including starting and end dates and usually a renewal option.
- Rent Amount: The monthly rent (not including all additional expenses) should be recorded. The agreement should also include information about rent increases.
- Security Deposit: Many lease agreements require a security deposit to begin using the property. This section should also describe how the security deposit is returned to the tenant.
- Pro-Rata Operating Costs: This section outlines the extra expenses the tenant is responsible for in addition to the rent. This includes taxes, insurance, utilities, and maintenance.
- Signatures: To be legally binding, the agreement needs to be signed by both parties, and many states will also require a notary certification.
Depending on the property, a triple net lease agreement may need to include additional terms. It is important to discuss your goals for the lease with your attorney, who can then draft a comprehensive lease agreement.
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Triple Net Lease Agreement Drafting
Suppose a triple net lease agreement isn’t drafted correctly. In that case, it could open a property to liability and a potential lawsuit.
It is always recommended that a property owner hire an experienced attorney to draft their lease agreement. A lawyer will ensure that the agreement contains all necessary terms, articles, and provisions to bind and protect the property owner legally.
Before beginning the draft for a triple net lease agreement, an attorney will usually meet with the landlord to go over the specifics of the property and the goals the property owner wants to achieve with the lease agreement. After the lawyer has gathered all pertinent information, they can draft a lease agreement.
Triple Net Lease Agreement Review
When tenants sign a triple net lease agreement, they take on a very large responsibility. Therefore, it is important that they fully understand the lease terms and ensure the lease is fair. For this reason, before signing a triple net lease agreement, a tenant should consider hiring an attorney to review the draft.
A lawyer will review the agreement in the tenant’s best interests. They will ensure the tenant understands all the terms and that the agreement is fair and legally binding.
Triple Net Lease Agreement Drafting Cost
A lawyer who is hired to draft a triple net lease agreement will charge the property owner for their time and services. This can include:
- The consultation
- The time it takes to write the agreement
- Revisions
- Follow-up meetings
ContractsCounsel’s marketplace data shows the average triple net lease agreement drafting costs are $580 across all states.
Triple Net Lease Agreement Review Cost
Suppose a tenant hires a lawyer to review their triple net lease agreement. In that case, the tenant will be responsible for their own legal fees. However, review costs are generally less than drafting costs because they require less time from the lawyer.
ContractsCounsel’s marketplace data shows the average cost to review a triple net lease agreement is $780 across all states.
How Do Lawyers Charge for Triple Net Lease Agreements?
Hourly Rates for Triple Net Lease Agreements
The most common way that lawyers bill their clients is through hourly rate fee structures. Using this agreement, the lawyer will provide the client with a set hourly rate. If the client agrees to the rate, the lawyer will be the client for the number of hours spent working on their case or project.
Bills can be sent periodically for more prolonged cases or as just one final bill when the project is completed.
Hourly rate fee structures allow a lawyer to be sure that they are fairly compensated for all the time they spent working on a particular project, like drafting or reviewing a triple net lease agreement.
ContractsCounsel’s marketplace data shows that the average hourly rate for a commercial real estate lawyer ranges from $200 - $350 per hour.
Flat Fee Rates for Triple Net Lease Agreements
When a lawyer is hired for a specific project, like drafting or reviewing a triple net lease agreement, they may opt to use a flat fee rate structure rather than dealing with the hassle of keeping track of and billing each hour.
When an attorney has a specific project to complete, they can easily estimate how long the task will take and come up with a fair flat fee rate to charge a client.
For clients, flat fee rate structures are beneficial because they know exactly how much their legal fees are from the beginning of the project.
ContractsCounsel’s marketplace data shows the average flat fee rate for a triple net lease agreement is $700.
Get Help with a Triple Net Lease Agreement
Do you need help with a triple net lease agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from corporate lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.
