In the commercial real estate world, the triple net lease is a common type of agreement between landlords and tenants, especially for retail and multi-tenant industrial properties. In a triple net lease, most of the expenses related to the operation of the property are the responsibility of the tenant.
The following are some things to keep in mind when it comes to a commercial triple net lease:
- In a triple net lease, fixed rent is often lower. Potential tenants may prefer a triple net lease if the building they are interested in is new, since in addition to lower rent, the cost of expenses will also be less.
- While triple net leases may have some advantages, they are often not favorable to tenants. This is because tenants do not have control over any potential increases in expenses. Therefore, it can be difficult for them to budget and plan for future costs. In a triple net lease, tenants must practice precaution and budget wisely, especially if they are using an older property. Tenants are likely to spend more in operating costs in older buildings, because the structure may need to be renovated.
- In contrast, a triple net lease is preferred by many landlords. This is because the tenants will be paying the taxes, maintenance costs, and insurance for the property.
- In a triple net lease, the type of business a tenant is running influences how much in operating costs he or she must pay. For example, medical offices may require more electricity, with the equipment they use (X-rays, medical ultrasounds, etc.) requiring specialized outlets and voltages.
Contact an Experienced Will County Real Estate Lawyer Today
Deciding whether or not a triple net lease is right for your business is a complex process. If you do decide that such a lease is what you are looking for, it is important to closely examine the contract to ensure that there are no hidden expenses and that your landlord is legally unable to increase fees each year. That is why at the Law Offices of Jack L. Zaremba, Attorney Ann Zaremba will help you understand the lease and contract you are about to sign and whether or not the lease is the best fit for you and your business interests. You can contact our Joliet commercial real estate lawyer by calling 815-740-402 or via our website. We assist clients with residential and commercial real estate transactions, contracts, leases, and more.