What is implied by a 'triple net lease'?

A triple net lease is a specific type of lease agreement in which the tenant is responsible for the payment of certain expenses in addition to their base rent. Under this arrangement, the tenant agrees to pay property taxes, insurance premiums, and maintenance costs associated with the property, effectively taking on more financial responsibility. This structure significantly impacts the financial dynamics of the lease, as it allows the landlord to receive rent without the added burden of these ongoing expenses.

In commercial real estate, triple net leases are often attractive to landlords because they provide a more predictable cash flow and a reduced management burden. Tenants may prefer them as well, especially if they are looking for lower base rents in exchange for taking on additional costs, which they might be able to manage more efficiently.

The other answer choices reflect different lease structures or conditions that do not align with the definition of a triple net lease. Understanding these distinctions can clarify how financial obligations are structured within lease agreements.