I have heard the term triple net a few times over the past couple of month but do not understand what is meant by this. I understand net, but what is meant by triple net?
triple net refers to leasing arrangements primarily in commercial rentals.
A gross lease includes as the Landlord's responsibility the maintenance of the property and the payment of the property taxes as well as certain utility expenses.
A net lease has the tenant pay the utilities.
A double net lease has the tenant pay the utilities and the taxes
A triple net lease has the tenant pay all the opertating expenses including the maintenance costs.
Landlords are always trying to find ways to get the tenants to buy for maintenance and taxes. But at least in FL, it is the landlords responsibility to insure that the home is habilitable, safe, and clean. That does not mean that landlords do not put clauses in the lease or tell the tenants that the must - but if they go to court NNN clauses in residential rentals will be thrown out.
Well, first you should always ask the lessor (better yet, READ the lease) what he/she means by a triple net lease. You will see that there is considerable variance in the lease terms. Yet all the lessors calls them "triple net".
I define my triple net leases as "The whole enchilada". Everything is the lessee's expense and responsibliltie.
I use them on all my properties-including SFR. You just have to have a well written lease. Never had one challenged (there's always a first time) in court.
Heard of a case in Oregon where the person renting was suppose to do the maintenance. They stopped paying the rent for some reason.
When it came time for eviction and talking with the judge the tenant brought in pictures of the things not up to the legal standard.
Landlord lost the eviction and had to pay for the fix up. Rent is adjust downward to reflect the unit is not in rentable state. Eviction proceedings are blocked for a period of time as there is an assumption of harassment otherwise.
Clearly the landlord was trying to get out of the responsibilities and the tenant was smarter about how the law actually works.
Different case the tenant was awarded $1,700 as compensation for living in a place that was below standard. They had not paid rent for a while in addition.
John
PS. If you do not want the legal responsibility of maintenance sell the property. You can do so on seller financing and receive payments. A L/O will not do it as you are still the owner. Minor stuff the tenant can be responsible for but large items (high cost items) are your issues as the landlord.
[addsig]
triple net refers to leasing arrangements primarily in commercial rentals.
A gross lease includes as the Landlord's responsibility the maintenance of the property and the payment of the property taxes as well as certain utility expenses.
A net lease has the tenant pay the utilities.
A double net lease has the tenant pay the utilities and the taxes
A triple net lease has the tenant pay all the opertating expenses including the maintenance costs.
love triple net or NNN
CommercialKing and CJ,
Thanks for the excellent explanation! But I've also heard of it in the context of SFH properties. Would it have the same meaning in that context?
Thanks again.
Robert
[addsig]
Landlords are always trying to find ways to get the tenants to buy for maintenance and taxes. But at least in FL, it is the landlords responsibility to insure that the home is habilitable, safe, and clean. That does not mean that landlords do not put clauses in the lease or tell the tenants that the must - but if they go to court NNN clauses in residential rentals will be thrown out.
Brenda
Quote:
On 2004-06-03 11:03, bgrossnickle wrote:
if they go to court NNN clauses in residential rentals will be thrown out.
Brenda
That's very interesting. Does anyone know what the laws are for California on this?
Thanks,
Robert
[addsig]
Well, first you should always ask the lessor (better yet, READ the lease) what he/she means by a triple net lease. You will see that there is considerable variance in the lease terms. Yet all the lessors calls them "triple net".
I define my triple net leases as "The whole enchilada". Everything is the lessee's expense and responsibliltie.
I use them on all my properties-including SFR. You just have to have a well written lease. Never had one challenged (there's always a first time) in court.
Sammy,
Thanks for your input.
Robert
[addsig]
Brenda is 'spot on' as the British like to say.
Heard of a case in Oregon where the person renting was suppose to do the maintenance. They stopped paying the rent for some reason.
When it came time for eviction and talking with the judge the tenant brought in pictures of the things not up to the legal standard.
Landlord lost the eviction and had to pay for the fix up. Rent is adjust downward to reflect the unit is not in rentable state. Eviction proceedings are blocked for a period of time as there is an assumption of harassment otherwise.
Clearly the landlord was trying to get out of the responsibilities and the tenant was smarter about how the law actually works.
Different case the tenant was awarded $1,700 as compensation for living in a place that was below standard. They had not paid rent for a while in addition.
John
PS. If you do not want the legal responsibility of maintenance sell the property. You can do so on seller financing and receive payments. A L/O will not do it as you are still the owner. Minor stuff the tenant can be responsible for but large items (high cost items) are your issues as the landlord.
[addsig]