ContractsCounsel Logo

Triple Net Lease Contract

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 7,503 reviews
Home Types of Contracts Triple Net Lease Contract

Jump to Section

Need help with a Triple Net Lease Contract?

Post Project Now

A triple net lease contract, commonly known as an NNN lease, is a lease agreement used in commercial real estate dealings between the property owner and lessor. Moreover, in a triple net lease, the lessee agrees to settle three main expenses besides the base rent: insurance, property taxes, and maintenance. This blog post will discuss a triple-net lease contract, its purpose, benefits, and more.

Objectives of a Triple Net Lease Contract

The primary purpose of a triple net lease contract is to specify the terms and conditions of a lease between a lessor and lessee. This type of contract holds the lessee accountable for settling rent and covering additional expenses associated with the commercial property, including insurance, property taxes, and maintenance expenses. Below are the key objectives of a triple-net lease contract.

  • Risk Reduction for Landlords: By shifting the financial burden of property expenses to the tenant, a triple net lease minimizes risks for landlords. The tenant is accountable for paying property taxes, insurance premiums, and maintenance costs, shielding the landlord from unforeseen increases in these expenses. Consequently, this arrangement ensures a consistent net income for the landlord, irrespective of fluctuations in operating costs.
  • Stability and Predictability for Tenants: Tenants derive stability and predictability in their occupancy costs through a triple net lease. Since they are accountable for property expenses, tenants can accurately anticipate their monthly expenditures, including rent and additional expenses. This predictability aids tenants in budgeting effectively and reduces the likelihood of unexpected financial burdens.
  • Long-Term Investment Opportunities: Triple net lease agreements often span extended periods, ranging from 10 to 20 years. Investors find value in this structure as it provides a stable and reliable income stream over an extended duration. Furthermore, these long-term leases can enhance the property's value since potential buyers are attracted to the predictability of the income they offer.
  • Shared Responsibilities: A triple net lease requires tenants to assume important responsibilities beyond rent payment. By taking on insurance, property taxes, and maintenance expenses, tenants are more willing to take adequate care of the commercial property, as they hold a vested interest in its maintenance. This shared responsibility facilitates a mutually beneficial association between landlords and tenants, motivating both parties to preserve the property's value and functionality.
  • Potential Tax Advantages: Triple net lease contracts may present tax benefits for landlords and tenants. Lessors can deduct property costs, such as insurance, repairs, and property taxes, from their taxable earnings. Likewise, depending on local tax regulations, tenants may deduct their share of property taxes and insurance expenditures. Both parties should consult tax professionals to gain a comprehensive understanding of the specific tax implications associated with a triple net lease agreement.

Key Considerations for Triple Net Lease Contracts

Below are some key considerations when drafting triple net lease contracts.

Tenant Creditworthiness and Stability

  • Conduct Thorough Tenant Screening: Before entering into a triple net lease contract, you must evaluate the tenant's creditworthiness and stability. It includes analyzing their financial statements, credit history, and references to ensure they have a reliable track record of meeting financial obligations.
  • Assess Tenant's Industry and Market Conditions: Understanding the tenant's industry and the overall market conditions can provide insights into their potential for long-term stability. Consider aspects like market demand, competition, and the tenant's business model to gauge their ability to generate consistent income.

Property Condition and Maintenance Requirements

  • Property Inspection: Before entering into a triple net lease agreement, thoroughly inspect the property to assess its condition. Identify any existing maintenance issues, structural concerns, or necessary repairs that may affect the tenant's ability to operate or comply with the lease terms.
  • Maintenance Responsibilities: Clearly define the maintenance responsibilities of the landlord and tenant in the lease agreement. Specify which party is responsible for routine maintenance, repairs, and essential structural improvements. Ensure these responsibilities align with the tenant's capabilities and financial capacity to avoid potential disputes or financial burdens.

Lease Negotiation and Documentation

  • Clear and Comprehensive Lease Terms: Draft a detailed lease agreement that clearly outlines the rights and obligations of the landlord and tenant. Address key aspects such as rent payment terms, escalation clauses, insurance requirements, property use restrictions, and dispute resolution procedures. Each provision should be negotiated and documented transparently to avoid misunderstandings and disputes.
  • Lease Term and Renewal Options: Specify the lease duration that aligns with the lessee's business requirements and provides the lessor with a reasonable return on investment. Additionally, consider including renewal options or negotiated terms for lease extensions to maintain a stable tenant relationship and ensure a predictable income stream.

Lease Termination and Renewal

  • Early Termination Provisions: Clearly define the conditions under which the lease can be terminated before its expiration date. Specify any penalties, notice periods, or remedies that apply in case of early termination by either party. It provides clarity and minimizes potential financial risks.
  • Renewal and Rent Adjustment Mechanisms: Establish the process and timeline for lease renewal negotiations, including potential rent adjustments. Clarify the factors influencing rent increases, such as market conditions or capital improvements, and define the method for determining fair market value.

Professional Legal and Financial Advice

  • Seek Legal Counsel: Engage an experienced real estate attorney who specializes in commercial leases to review and provide guidance throughout the negotiation and documentation process. They can help ensure compliance with local laws, protect your interests, and clarify any legal ambiguities.
  • Consult with Financial Advisors: Collaborate with financial advisors or accountants to assess the financial viability of the lease terms, evaluate the potential risks and returns, and analyze the impact on your overall investment strategy. They can provide insights into tax implications, financial projections, and possible exit strategies.
Meet some lawyers on our platform

Gregory B.

138 projects on CC
View Profile

Ryenne S.

434 projects on CC
View Profile

Brian R.

1 project on CC
View Profile

James H.

2 projects on CC
View Profile

Key Terms for Triple Net Lease Contracts

  • Rent: Rent refers to the amount of money that the tenant pays to the landlord in exchange for using a property that is being rented.
  • Security Deposit: A security deposit is a monetary amount the tenant provides to the landlord at the commencement of a lease agreement to ensure safety and cover potential damages or unpaid rent.
  • Term: The term refers to the period when a lease agreement remains valid and enforceable.
  • Default: Default occurs when either the landlord or the tenant fails to fulfill obligations outlined in the lease agreement.
  • Net Real Estate Taxes: These are the property taxes imposed on the leased property, generally the tenant's responsibility under a triple net lease.
  • Insurance Premiums: These are the expenses of insurance coverage for the leased property, such as liability and property insurance, typically settled by the tenant in a triple net lease.
  • Renewal: Renewal extends the lease agreement duration after its original expiration date.

Final Thoughts on Triple Net Lease Contracts

In a nutshell, the triple net lease contract is an essential instrument in commercial real estate that benefits landlords and lessees. While it shifts monetary responsibilities to tenants, it provides stability and customization possibilities. Understanding the intricacies of the triple net lease and seeking professional guidance can help landlords and lessees make informed decisions and mitigate risks associated with this lease contract.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Triple Net Lease Contract Lawyers

Jesse A. on ContractsCounsel
View Jesse
5.0 (3)
Member Since:
August 1, 2023

Jesse A.

Free Consultation
Kingsford, Michigan
12 Yrs Experience
Licensed in MI, WI
University of Illinois-Chicago

General practice attorney with experience in civil litigation, family law, criminal law, estate planning, business formation, real estate and business transactions.

Morgan S. on ContractsCounsel
View Morgan
5.0 (4)
Member Since:
July 31, 2023

Morgan S.

Free Consultation
Austin, Texas
2 Yrs Experience
Licensed in TX, WV
University of Pittsburgh Law School

Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.

Diamond R. on ContractsCounsel
View Diamond
Member Since:
July 30, 2023

Diamond R.

Free Consultation
Houston, Texas
1 Yr Experience
Licensed in DC, NY, WA
Wayne State University

July 29, 2023 My name is Diamond Simpson Roberts, ESQ, MSPH and I am convinced that I can be a value added asset to most any company. As the first in my family to graduate a four-year university, I graduated from Wayne State University Law School in 2000 but could not afford a bar prep course upon completion. After over 20 years, I sat for the July 2022 UBE, successfully passed and am currently licensed in three states! This is an example of my self-motivation, internal drive and passion. I offer over 28 years of diverse experience in healthcare, strategy, sales/marketing, legal/policy and business savvy. I have many years building, leveraging, and sustaining long term relations to drive revenue as an entrepreneur and for corporations. My analytical strengths provide me with an innate ability to think through tough situations/topics while viewing both vantage points (which is excellent for law and life). I have been appointed to serve on numerous committees due to my heightened ability to identify client issues and priorities and provide solutions based upon relevant products, services and needs. I have led teams with and without authority; specifically, I have managed teams for an Adult Foster Care Facility called Etonne Cares, during my post-graduate fellowship with the largest Catholic Healthcare System in the U.S. and during my two-year executive order appointment with the Federal Government (Presidential Management Fellowship). Most importantly, I am a collaborative team player who knows how to improvise, overcome and adapt! I offer numerous years of being a pharmaceutical trainer and being an adjunct using the online platform. I welcome the opportunity to continue in the interview so that I may further highlight the skills I can (and will) contribute to my success in the role. Respectfully, Diamond Simpson Roberts, ESQ, MSPH DQSSIMPSON@GMAIL.COM M: 313-942-6747

Esra A. on ContractsCounsel
View Esra
Member Since:
July 30, 2023

Esra A.

Free Consultation
Atlanta, Georgia
7 Yrs Experience
Licensed in GA
University of Georgia School of Law (LLM)

I have worked on various types of contracts throughout my career. My most current experience is the Contract Specialist role at a tech startup called Worksome. During my time there, in addition to managing day-to-day contract related tasks, I also drafted a new master services agreement and new online terms and conditions for the company.

Benjamin M. on ContractsCounsel
View Benjamin
Member Since:
August 1, 2023

Benjamin M.

IP Attorney
Free Consultation
Atlanta, Georgia
2 Yrs Experience
Licensed in GA
Michigan State University

To begin his legal career, Ben was a legal fellow with Georgia Lawyers for the Arts. Ben also assisted Michigan State University in protecting its registered intellectual property as lead intellectual property (IP) intern for Michigan State University's Center for Anti-Counterfeiting and Product Protection (A-CAPP Center). During this time, Ben organized and moderated a panel discussion with U.S. Customs and Border Patrol agents for A-CAPP's annual Brand Protection Strategy Summit. Ben was selected to join a team of law student interns in Lovran, Primorje-Gorski Kotar, Croatia, to handle matters involving cybercrime, international copyright, the Uniform Domain-Name Dispute-Resolution Policy and the General Data Protection Regulation. Before studying law, Ben worked for Core Security and Meridian Link as a software QA engineer. As a member of Million Dollar Minds Entertainment (Est. 2006) Ben produced countless commercial music recordings, engineered hundreds of songs, and served as executive producer seven studio albums. Ben enjoys spending time with his wife and two daughters. He is an alumnus of The South Carolina State University and Michigan State University College of Law.

Joeie S. on ContractsCounsel
View Joeie
Member Since:
July 31, 2023

Joeie S.

Managing Member, The Skelly Law Firm
Free Consultation
Cape Coral, FL
1 Yr Experience
Licensed in FL
Western Michigan University Thomas Cooley Law School

Attorney Skelly is a midwestern transplant from Iowa. She has been in Florida for the past 11 years. She went to undergrad at Buena Vista University, which is a small liberal arts college in Storm Lake, Iowa. After graduating with her Bachelor's degree in criminal justice, she went on to obtain her Master's degree in criminal justice from Kaplan university, which is now Purdue Global. While attending school full time for her Master’s degree, Attorney Skelly worked full time in social services helping children and their families who were involved in the dependency system. Attorney Skelly has a professional background in child welfare and social services having worked for 18 years in the field. Attorney Skelly always had a lifelong dream of becoming a lawyer and decided to fulfill her goal in May of 2019 by starting law school at Western Michigan University Thomas M. Cooley Law School at their Riverview campus. She did their accelerated program and completed law school in just over two years and graduated magna cum laude with honors. Attorney Skelly also received certificate of merit awards, which means attaining the highest grade in the class in secured transactions, research and writing, and family violence practice. While in law school Attorney Skelly was a teaching assistant to two tenured professors as well as a note taker for those students who had accommodations. She was also awarded the Alumni Association’s Distinguished Student Award. In her legal career, Attorney Skelly started out at the State Attorney’s Office in Fort Myers, FL. She helped prosecute several cases and personally worked as second chair on 9 jury trials and one bench trial. Once Attorney Skelly passed the bar, she worked for a family law firm under a board certified marital and family law practitioner where she gained tremendous knowledge in the area of family law which includes divorce, paternity, child custody/parenting plans, alimony and child support as well as domestic relations issues such as domestic violence injunctions. Attorney Skelly is also certified as a Guardian ad Litem and can serve as a Guardian ad Litem in family court cases. Attorney Skelly is a proud member of the Florida Bar, the Lee County Bar Association, and the American Bar Association.

Daniel W. on ContractsCounsel
View Daniel
Member Since:
July 31, 2023

Daniel W.

Principal Attorney
Free Consultation
Gallup, New Mexico
13 Yrs Experience
Licensed in ID, NM, WA
Seattle University School of Law

In my thirteen years of practice, I've had the opportunity to argue cases in state, federal, and tribal courts; in subjects as diverse as gaming, land tenure, water rights, treaty rights, finance, employment, criminal defense, conflict of laws, and tort (among others). But the real value I brought my clients came through avoiding litigation, fostering relationships, and developing long-term strategies.

Find the best lawyer for your project

Browse Lawyers Now
Triple Net Lease Contract lawyers by city
See All Triple Net Lease Contract Lawyers
related contracts
See More Contracts
other helpful articles

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer


Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city