From the tenant`s and/or tenant`s point of view, a net tenancy must adequately compensate for the risk the tenant takes from the landlord. In other words, the cost differential between gross leasing and net leasing must be large enough to offset the unpredictable costs of maintenance and the potential increase in tax and insurance costs. The landlord gives some money in the rent to save headaches, and the tenant takes the discount knowing that the annual cost of real estate can vary. Three-way net real estate can be very beneficial as a landlord and landlord, as you can pass on to your tenant many of the costs that normally fall under the owner`s responsibility (. B, for example, taxes, maintenance and repairs). The concept of net tenancy refers to a contractual contract in which a taker pays, in addition to rent, some or all of the taxes, insurance fees and maintenance costs of a property. Net leases are often used in commercial real estate. In the purest form of a net lease, the tenant is supposed to cover all the costs of a piece of land, as if the tenant were the real owner. A net tenancy is the opposite of a gross rental agreement in which the tenant pays a rental package, while the lessor is responsible for the other costs. Since the gross lease is more favourable to tenants and the net lease tends to be more favourable to landlords, there is a compromise lease for both parties. The amended gross tenancy agreement (sometimes referred to as a modified net tenancy agreement) is similar to a gross tenancy agreement, since the rent is charged in a lump sum that may include any of the «networks» – property taxes, insurance and CAMS.
Providers and services are generally excluded from the rent and are covered by the tenant. Tenants and landlords negotiate which «networks» are included in the base rent. The tenant, who works under a triple net lease, benefits from the transparency of the necessary maintenance and, in general, a much lower basic monthly rent. The «unknown» factor of unexpected or emergency costs is passed on to the tenant. The compromise for the landlord is to monitor the property to ensure that the tenant complies with the terms of the tenancy agreement with respect to maintenance and repairs, and the execution of the lease accordingly. Many NNN leases allow the landlord to inspect the property, make repairs and charge the tenant accordingly, if the tenant does not maintain the property under the terms of the tenancy agreement.