What Is a Triple Net Lease?
A triple net lease is a common form of lease agreement used in commercial real estate. The NNN lease is typically a long-term agreement where the tenant pays rent, utilities, and all additional building expenses. These expenses include property taxes, insurance, and maintenance costs. Many landlords use a bondable net lease, which prevents tenants from preemptively terminating the lease agreement. In turn, landlords are prevented from increasing the rent during the term of the agreement.
Advantages of the NNN Lease
Triple net leases offer unique benefits to both landlords and tenants:
- Long-Term Rentals – Most NNN leases are structured around a long-term agreement of 10 to 20 years. Hence, tenants benefit from procuring a long-term location for their business, and landlords enjoy stable, long-term income without the risk of losses due to vacancy.
- Location – Triple net leases are most common in areas that are densely populated and with close proximity to other popular businesses. As such, tenants enjoy prime business locations in high traffic areas.
- Tax Benefits – Because tenants are responsible for property taxes, they may be eligible for business-related tax breaks.
Why Is an Inspection Important?
During the best of times, NNN leases are great for everyone involved. When issues with the property arise, however, disputes between tenants and landlords are common. As such, ordering a commercial property inspection prior to signing the agreement is of extreme importance. The inspection report provides iron-clad details about the condition of the property prior to occupancy. In turn, this information protects both parties from paying for damages that are not their responsibility.
Request a Quote
Don’t risk the financial future of your business on a questionable building. Instead, contact Burgess at (844) 804-9219 to request a quote for a commercial inspection. We inspect a wide range of properties throughout Henrico and Chesterfield Counties.