A commercial property that is being leased to a tenant comes with one main bill: the monthly lease payment. But that by no means is the only cost that the property owner is going to face. There are also things like utilities, property, taxes, the cost of maintenance and much more.
One area where disputes can begin is regarding who has to cover these costs. Perhaps you own a commercial space and you believe that your tenant was going to pay all of the costs in addition to the monthly rent. However, the tenant believes that they only had to pay the rent and that you would cover everything else. There could be tens of thousands of dollars in the balance, so who has to pay?
How many nets does the lease have?
The answer is going to be found in the lease, which may be a single-net lease, a double-net lease or a triple-net lease. The type that was used initially will determine who has to make these payments.
For instance, the most basic agreement will only address the rent. A single-net lease, however, will also require the tenant to cover the cost of property taxes. With a double-net lease, the tenant has to pay the rent, the property taxes and the property insurance. With a triple-net lease, all of these costs have to be covered, along with utilities and maintenance.
Many commercial leases are triple-net leases, but not all. You can see how important it is to understand how the lease is being drawn up initially and to fully grasp all of the obligations that it creates once it has been signed.
For those who find themselves involved in an expensive dispute, it can become very important to understand all of your legal options.
