Updated:
A triple net lease is a commercial lease with tenant-paid property costs. The lease adds property taxes, building insurance, and maintenance, called the nets, to base rent. This page gives a worked NNN example, its key clauses, and filling-out steps.
Key facts
Build Your Document
Answer a few simple questions to make your document in minutes
Save and Print
Save progress and finish on any device, download and print anytime
Sign and Use
Your valid, lawyer-approved document is ready
A triple net lease example shows base rent plus the tenant's share of taxes, insurance, and maintenance, added together into one monthly payment. The example below follows the blanks of the lease form: the premises size, its share of the center, the base rent, and each net charge.
Example (made-up figures): A tenant leases a 2,000 square foot retail unit in a 10,000 square foot shopping center, so its share of the center is 20%.
The sample lease in the screenshots further down uses the same structure. Each blank in it is a negotiated term, so the figures in a real lease come from the landlord and the tenant, not from the form.
A triple net lease, also called an NNN lease, is a lease agreement where the tenant pays the property's running costs: property taxes, building insurance, and upkeep, in addition to rent and utility fees.
Without a triple, double, or single net contract, the landlord is typically responsible for all payments.
An NNN lease gives the tenant control of a space without buying the property. It gives the owner a steady rent with fewer property costs to carry.
An NNN lease shifts most property costs to the tenant, and that shapes every other term. These points come up before a landlord offers one or a tenant signs one:
A triple net lease is the opposite of a gross lease. In a gross lease, the landlord pays the property taxes, insurance, and repairs, so the tenant’s annual rent is considerably higher. In an NNN lease, the tenant pays these costs directly, which keeps the base rent lower.
| Lease type | Tenant pays | Landlord pays |
|---|---|---|
| Gross lease | Rent, and sometimes utilities | Property taxes, building insurance, and maintenance |
| Single net lease | Rent and property taxes | Building insurance and maintenance |
| Double net lease | Rent, property taxes, and building insurance | Maintenance |
| Triple net (NNN) lease | Rent, property taxes, building insurance, and maintenance | Sometimes the roof, structure, and common areas |
A gross lease folds the property costs into one rent figure that the landlord sets in advance. A gross lease can specify that the occupant is responsible for all utilities. The landlord then carries building insurance, property taxes, and regular maintenance out of that rent.
A single net lease adds only property taxes to the tenant's rent. A double net lease adds property taxes and building insurance, and leaves maintenance with the landlord. An NNN lease adds all of them, which makes it the most hands-off setup for the landlord.
A triple net lease clause assigns one property cost or one tenant right to a party, and the clauses below set this lease apart from a gross lease. Each matches a blank or a checkbox on the form.
The base rent clause gives the annual rent and its equal monthly installment, in words and in figures. The clause also says whether rent stays flat or rises each year, and the form's table lists the annual and monthly rent for each later year.
The CAM clause charges the tenant for shared areas such as the parking lot, the lobby, restrooms, and hallways. The form sets the charge from the premises' square feet and their percent of the center's total square footage, which is the tenant's pro rata share.
The property tax clause passes the tenant's share of the real estate taxes through as a yearly amount with a monthly installment. Before signing, the tenant may check that the property's real estate taxes are paid up to date.
The insurance clause moves the property insurance premium to the tenant. The amount depends on the value of the property, so the parties settle the coverage with an insurance agent before signing.
The repairs clause gives the tenant the cost of upkeep and repairs to the premises. Many NNN leases keep the roof, the structure, and the common areas with the landlord, so this clause is the one to read twice: a vague clause leaves a large repair bill without an owner.
The renewal clause offers a renewal term at a set rent, a renewal on terms still to be negotiated, no renewal, or a month-to-month continuation at the same rent. The holdover clause sets the rent, as a percent of the current monthly rent, for a tenant who stays after the term ends. The guaranty clause names a third party guarantor who answers for the tenant's payments, or says there is none.
A triple net lease payment is base rent plus the tenant's share of the yearly property costs, spread over the months of the year. A calculator or a spreadsheet does the same arithmetic as these steps.
A rent quoted per square foot "NNN" gives only the base rent, and the nets come on top of it.
Example (made-up figures): A listing at $20/SF NNN for a 1,500 square foot space means base rent of $20 per square foot per year, or $30,000 a year. If the nets run $5 per square foot, the tenant pays $25 per square foot in all, or $37,500 a year ($3,125 a month).
The method is pretty straightforward if you’re renting a whole building to one tenant. A building with several tenants spreads taxes, insurance, and common area upkeep across all of them, and each tenant pays its pro rata share. The calculation then includes the cleaning, utilities, and equipment for restrooms, hallways, and the lobby.
A triple net lease fits best when the tenant wants a lower base rent and is ready to handle the property’s running costs. It tends to suit long-term occupants of commercial space, shared properties with low vacancy, and tenants who have worked out the extra charges in advance.
An NNN lease is the usual setup for freestanding commercial buildings with a single occupant, and the square footage sets the amount of rent. Industrial tenants often find it cheaper than a gross lease, since they pay the actual property costs rather than a landlord's estimate built into the rent.
A well-run property with low vacancy suits an NNN lease, because more tenants share the taxes, insurance, and upkeep. Each tenant pays a smaller prorated share of the running costs and of the CAM charge.
A gross or double net lease fits better when the tenant wants one predictable payment, or when the building is old enough that repairs are hard to predict. A short stay also suits a gross lease, since the tenant has less time to recover what it spends on the property.
A triple net lease gives the landlord steady income and the tenant a lower base rent, and each side takes on a different risk in exchange. Inflation, property repair expenses, and the number of tenants all affect whether an NNN lease is right for a property.
However, when commercial property prices in the neighborhood rise, landlords who are locked into a long-term lease may lose the ability to raise the rent, which can affect their income in the long run.
An NNN lease usually carries a lower base rent than a gross lease. The tenant takes on costs that change from year to year, such as a tax increase or a large repair, so the total cost is harder to predict. A tenant with a strong credit history gets better terms, because the owner relies on the tenant to cover the property costs.
An NNN lease deal is a relatively low-risk transaction for an investor. The occupant is responsible for almost all of the expenses involved with the property, from taxes and maintenance to daily repair costs. The main risk is a tenant default, which leaves the investor carrying the property costs while the space sits vacant.
An NNN lease is mostly a matter of contract, and the sources behind this page hold only a few commercial lease rules, in California and North Dakota. Each one below names its code section.
| Where | Rule | Source |
|---|---|---|
| California | An owner of commercial real property hired by a qualified commercial tenant gives notice at least 60 days before the proposed termination date when the tenant has occupied the property one year or more. | Cal. Civ. Code § 1946.1(b) |
| California | The notice is at least 30 days before the proposed termination date if the tenant has occupied the property for less than one year. | Cal. Civ. Code § 1946.1(c) |
| California | In a lease of commercial real property by a qualified commercial tenant from week to week, month to month, or other period less than a month, the landlord may increase the rent upon giving written notice to the tenant, by one of the procedures the section sets out; the section sets how far ahead the notice must be delivered, and that period depends on the size of the increase. | Cal. Civ. Code § 827(b)(1) |
| North Dakota | A political subdivision may not enact, maintain, or enforce an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private commercial property. | N.D.C.C. § 47-16-02.1 |
The California rows reach only a qualified commercial tenant, the term the quoted sections use (Cal. Civ. Code § 1946.1(b) and § 827(b)(1)); the Civil Code gives that term its own definition, so a commercial tenant outside it falls outside these rows.
The California rows concern tenancies that run period to period, such as a lease that continues month to month after its term, one of the renewal choices on the form. Outside California and North Dakota, the sources behind this page hold no commercial lease rule of this kind.
The triple net lease form covers rent, common area maintenance, property tax, security deposit, and signatures, with fillable blanks and checkboxes for each term the parties agree on.
| Document Name | Triple Net Lease Agreement Form |
| Other Name | NNN Lease Agreement |
| Avg. Time to Fill Out | 16 minutes |
| # of Fillable Fields | 97 |
| Available Formats | Adobe PDF |
The triple net lease form is filled out section by section, from the parties to the signatures, in the order below. The screenshots under each step show the lease filled with sample entries in blue, so each answer's place is clear. The names, addresses, dates and amounts are examples only.
Step 1: The parties, reference date, county and state (Sections 1 and 3)
Enter the Reference Date, the Lessor name and the Lessee name in Section 1. Then enter the county and the state where the Premises sit in Section 3.
Step 2: The premises, the Center and the use (Sections 3 and 4)
Write the street address after COMMONLY KNOWN AS, the approximate square feet, and the name of the project or shopping center. In Section 4, write what the Lessee will use the Premises for.
Step 3: Term and occupancy (Section 5)
Enter the length of the term in words and numerals, the Rent Commencement Date and the end date. Tick one box: permission to occupy on signing, or no occupancy until the Rent Commencement Date.
Step 4: Renewal option (Section 5A)
Tick the renewal box that fits. For the first, enter the renewal years and the rent amount for the renewal term. The second leaves the renewal terms to be negotiated.
Step 5: No renewal or month-to-month (Section 5A, page 2)
If no renewal option applies, tick either 'There shall be no renewal term' or the box that continues the lease month-to-month on the same rent after the Term ends.
Step 6: Base Rent (Section 6(b))
Enter the first-year annual Base Rent and the equal monthly installment, each in words and figures. Then tick either no increase or the yearly increase, and enter the increase as words and a percent.
Step 7: Base Rent by year (Section 6(b) table)
If you chose a yearly increase, fill each row with the annual and monthly Base Rent. Start with Year Two and Year Three, and use the blank rows for later years.
Step 8: Common area maintenance charge (Section 6(c))
Enter the Premises square feet, its percent of the Center's total square footage, the first-year CAM charge and the equal monthly installment.
Step 9: Property tax and security deposit (Sections 6(d) and 7)
Enter the first-year Property Tax share and its monthly installment in Section 6(d). Then enter the security deposit amount in Section 7.
Step 10: Damage or destruction blanks (Section 17)
Enter the number of days for repairs and the number of days for written notice after the triggering event. Then enter the number of months at the end of the term that count as 'near end of term'.
Step 11: Lessor notice address (Section 18)
Under LESSOR, enter the notice address and the office, cell and fax numbers and the email address.
Step 12: Lessee notice address (Section 18)
Under LESSEE, enter the notice address and the office, cell and fax numbers and the email address.
Step 13: Holdover rate and guaranty (Sections 26 and 31)
In Section 26, enter the percent of the current monthly Rent charged for holding over. In Section 31, tick either no third party guarantor or the box naming the Guarantor, and write the Guarantor's name.
Step 14: Force majeure and Lessor signature (Sections 32 and 33)
Tick either 'No Force Majeure clause applies' or the Force Majeure clause. Section 32 has no blank. Then enter the witness name and sign the LESSOR block with the Lessor's name and its title.
Step 15: Lessee signature and witness
In the same way, enter the second witness name and sign the LESSEE block with the Lessee's name and its title.
A triple net lease agreement contains standard sections beyond the blanks, and they decide who pays for what once the lease is running. The sections below cover rent and utilities, repairs, damage, and breaches.
The rent and deposit sections above set the money terms of the lease. Each party reads them in full, with the figures filled in, before signing.
The CAM section adds a monthly charge for Common Area Maintenance (CAM).
In a triple net commercial lease, the tenant pays all the utility fees as explained above.
The tax section puts the real estate taxes on the tenant.
The compliance section above makes the tenant answerable for following the rules and regulations that apply to its use of the premises.
The repairs section sets out the rules and the procedure for repairs and alterations.
The insurance section leaves the amount of coverage to the value of the property, so the parties check it with a real estate insurance agent.
The indemnity section protects both the landlord and the tenant from losses and claims caused by the other party.
The lien section protects the landlord against amounts the tenant leaves unpaid. It gives the landlord a contractual lien on the tenant’s non-exempt property for the overdue balance, and the balance may also come out of the security deposit.
How a landlord may enforce that lien, by holding the property itself or only through a legal action, differs from place to place, so the parties check the rule where the property sits before relying on it.
Section 17 sets what happens after a fire, an earthquake, or a similar event damages the premises: the owner repairs within the number of days the parties enter, written notice follows within the days set, and a loss near the end of the term may end the lease. The section does not release either party from every responsibility for the loss.
The waiver section bars the tenant from claims against the landlord for events outside the landlord’s control.
The use sections that follow set out how the premises may be used.
The section above explains what happens if the premises become unusable.
The default section lists the events that count as a breach of the lease.
The remedies section that follows explains how a breach can be cured or remedied.
The next sections set the remaining steps before either party takes action, and one covers access for persons with disabilities who visit the premises.
The last standard section sets the basis for enforcing the lease.
An NNN lease is ready for a final review and signatures once every blank is filled in, and the read-through catches mistakes before the term starts.
A different commercial lease fits when the space or the deal is different: an office, a storage unit, a garage, an event venue, or a sublease of space a tenant already rents. The general commercial lease agreement covers a deal that none of these fits.
NNN stands for triple net. The three nets are property taxes, building insurance, and maintenance. In an NNN lease, the tenant pays these costs on top of the rent, which is why the base rent is usually lower than in a gross lease.
The tenant pays for repair costs and upkeep. The roof, structure, and common areas like the parking lot may still be the landlord’s responsibility.
The tenant pays the utilities, such as electricity and water, along with its own business operating expenses.
A triple net lease is a good idea for a tenant with steady finances who wants a lower base rent and control of the space. It is a poor fit for a tenant who needs one fixed monthly cost, since taxes, insurance, and repairs change from year to year.
Every blank in an NNN lease is open to negotiation before signing, including the base rent, the yearly increase, the CAM share, the renewal option, and who repairs the roof and structure.
These leases usually have an initial term of 10 years or longer, and some run up to 20 years.
General information, not legal or tax advice.
