A net lease is a legal binding contract made to facilitate the landlord and the tenant. A net lease is a lease agreement in which the tenant pays the rent as well as other expenses; insurance, property tax, repair, maintenance, utilities, and other such expenses to use the land.
The net lease is divided into three types; single, double, and triple net leases. All three types of net leases impose different responsibilities on the tenants. Therefore, for each one of us, it is important to know what a single, double, and triple net lease is? And what is the difference between these types of net leases?
Single net lease
A single net lease is the type of net lease that is also referred to as a "Net lease". It is the landlord's least favourite type of contract and happens to be the least common as well.
In the single net lease contract, a " very" little amount of risk is transferred to the tenant. To be more specific, the tenant is only required to pay the property tax. The rest of the expenses like insurance, repairs, maintenance, and utility are paid by the landlord himself.
Double net lease
A double net lease, also known as NN, is a bit more common than a single net lease. The double net lease is the type of net lease agreement that puts an equal burden on both parties.
In the double net lease contract, the tenant is liable to pay property tax and the building insurance. Whereas, the rest of the expenses like structural repairs and maintenance is on the landlord's shoulder.
Triple net lease
A triple net lease is often referred to as NNN. It is the most common type of net lease contract that frees landlords from most responsibilities. In the triple net lease contract, the tenants are required to pay all real estate taxes; insurance, property tax, maintenance, etc. Check https://www.netleaseworld.com/ for our leased properties.
What is the difference between Single, Double, and Triple Net leases?
The major difference between the single, double, and triple net lease is that the single net lease transfers minimal risk, the double net lease distributes the risk fairly, and the triple net lease transfers the whole risk to the tenant.
The other noticeable difference is that in a single net lease contract the rental charge is high as the least amount of risk is being transferred. In a double lease contract, the rental gets lower, it's lowest in a triple net lease contract as the whole risk is transferred to the tenant.
In brief, single, double, and triple net leases are all the types of net lease. A single net lease is a contract that requires you to pay property tax, the double lease demands property tax and building insurance, whereas, a triple net lease put the responsibility of all real estate taxes on the tenant's shoulder. The rental charge is the single net lease contract is high, a bit lower in the double net lease, and the lowest in the triple net lease contract.