The Four Types Of Commercial Leases

There are four different types of commercial leases that each place different responsibilities on the tenant and landlord. These are known as net lease, double net lease, triple net lease, and absolute triple net lease. They can be abbreviated as N, NN, NNN, and Absolute NNN respectively. In general, N places the fewest responsibilities on the tenant and Absolute NNN places the most. However, in certain cases a tenant may prefer an NN lease over an N lease, if the tenant is adamant about not paying maintenance costs.

For each of these lease types, the tenant is responsible for their base rent plus some additional property expenses. The landlord in turn is responsible for structural issues, for all except an Absolute NNN lease, and may be responsible for some other costs. In an N lease, the additional property expenses tenant is responsible for include a portion of the property taxes, insurance, and maintenance costs. The landlord is responsible for major repairs. With an NN lease, the tenant is responsible for the entirety of the property taxes and insurance, but unlike an N lease, it’s the landlord who is responsible for maintenance costs. With an NNN lease, the landlord’s only responsibility is major structural repairs. The landlord’s only role for an Absolute NNN lease is collecting rent.

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