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A triple net lease is a commercial lease between a property owner or manager and a tenant, commonly used for retail, industrial, and free-standing buildings. In this agreement, the tenant is responsible for three primary expenses: property insurance, real estate taxes, and common area maintenance. These costs, referred to as the "three nets," are usually estimated annually and included in monthly rent. At year-end, adjustments are made based on actual expenses—if costs are lower, the tenant receives a refund; if higher, the tenant pays the difference. Tenants often request a cap on the triple net expenses to limit their financial exposure.
