Transform your daily workflows and Make Modifiable Triple Net Lease Agreement

Aug 6th, 2022
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How to Make Modifiable Triple Net Lease Agreement

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if youre looking at leasing commercial space you have seen several different variations of lease structures from which to choose the triple net lease is one of the most attractive for investors and landlords but it also has its fair share of cons heres what landlords need to know about triple net leases first the pros of a triple net lease number one minimal landlord responsibilities the three nets in a triple net lease are common area maintenance property taxes and building insurance which get passed through directly to the tenants each tenant will pay their proportionate share of these expenses and property management is often covered under common air maintenance meaning a landlord will have minimal responsibility when it comes to expenses and maintenance of the property because of this its possible and fairly common for investors to buy triple net properties across the country and not just in their backyard number two long-term occupancy some triple net properties especially sin

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In a modified triple net lease, the tenant will still pay the net taxes, insurance, and CAM, but may pass along roof and structure costs to the landlord. Starbucks is a prime example of a modified NNN lease.
A lease that requires only that basic rent be paid, usually on a monthly basis, is known as a gross lease. Generally, a lease that requires that a Tenant pay additional expenses is known as a triple net (NNN) lease.
What Is the Difference Between a Gross Lease, Modified Gross Lease and Net Lease? Gross lease is where the landlord pays for operating expenses, while a net lease means the tenant takes on the property expenses. A modified gross lease means that the operative expenses are borne by the tenant and the landlord.
Drawbacks to a Triple Net Lease There is an inherent danger in using a triple net lease with regards to the unknown. Unexpected and substantial damage to the property could docHubly increase your monthly maintenance and repair costs.
The Triple Net Lease (NNN) puts all of the property expense risks on the Tenant. The Modified Gross Lease (MG) splits the expense risks between the Landlord and Tenant. Both Tenants and Landlords should consider a Modified Gross Lease if it leads to a lease agreement that both parties are comfortable with.
A modified gross lease is common for commercial properties with more than one tenant. It typically stipulates that a tenant is responsible for paying the base rent as well as some other expenses that are associated with the property such as utilities, insurance and property taxes.
Since most NNN lease contracts are set by the tenants corporation, there is usually no room for negotiation when you initially purchase a NNN property.
In a modified triple net lease, the tenant will still pay the net taxes, insurance, and CAM, but may pass along roof and structure costs to the landlord. Starbucks is a prime example of a modified NNN lease.

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