What Is a Double Net Lease?

A double net lease (also known as a 'net-net' or 'NN' lease) is a lease agreement in which the tenant is responsible for both property taxes and premiums for insuring the building. Unlike a single net lease, which only requires the tenant to pay property taxes, a double net lease passes more expenses along in the 🅠fo🅠rm of insurance payments.

The landlord is still held responsible for structural maintenance expenses. Eaꦬch month, the landlord receives the base rent plus the additional payments.

How Double Net Leases Work

Net leases are just like owning property without actually having legal title over it. They are lease agreements between 澳洲幸运5开奖号码历史查询:landlords and tenants where the tenant pays for rent and any other cost associated with the property in question. The agreement may include one or more expenses including insurance, property taxes, utilities, maintenance and repairs, and other 澳洲幸运5开奖号码历史查询:operational costs. ⛎Most landlords generally aౠccept lower rent payments because of the additional costs associated with net leases.

Double net leases are most commonly found in 澳洲幸运5开奖号码历史查询:commercial real estate. For commercial properties with multiple tenants, such as a shoppi⛦ng mall, taxes and insurance fees may be assigned to the individual tenants on a proportional basis. Even if property taxes and building insurance premiums are considered the responsibility of the tenant, owners of commercial property should have property taxes passed through themselves to ensure that they are aware of payment issues.

Double Net Lease vs. Other Types of Net Leases

In a single net lease, the lessee or tenant is responsible for paying property taxes.♛ Single net leases are not common

A 澳洲幸运5开奖号码历史查询:triple net lease (also known as an 'NNN' lease) is a lease agreement in which the tenant or lessee agrees to pay all real estate taxes, building insurance and maintenance, in addition to normal expected costs under the agreement (rent, utilities, etc.). In such a lease, the tenant or lessee is also responsible for all costs associated with the repair and maintenance of any common area. This form of lease is co🦩mmon for freestanding commercial buildings, but it can also be used in single-family residential rental leases. 

When maintenance costs are higher than expected, tenants under triple ne🌄t leases frequently attempt to get out of their leases or obtain rent concessions. For this reason, many landlords prefer bondable net leases, which is a type of triple net lease stipulating it cannot be terminated before its stated expiration date and the rent amount cannot be altered for any reason, including unexpected and significant increases in ancillary costs.

The 🙈Difference Between Gross and Net Commercial Lease

In contrast to net leases, a typical commercial gross lease, the landlord pays all of the building’s maintenance, insurance, and property taxes. The costs of these services are often reflected in higher monthly rent. It’s common for the tenant to accept reasonable caps on the landlord’s exposure to the tenant’s use of these services and utilities. Often, parties will agree to 🧸a “base year” es⭕timated expense, with the landlord billing the tenant for any overage.