Due to the lack of a defined lease template or format at the state or federal level, commercial real estate leases in Ohio, Indiana and Kentucky come in different forms. It is uncommon to encounter a lease agreement that is similar to a prior lease agreement unless you are negotiating with the same landlord on the same property. Even lease terms can differ. This makes it even more crucial to read and comprehend the terms and conditions of every lease agreement.

A triple net lease (NNN) is one of the most typical lease structures you'll come across. Other popular lease types are double net (NN) and single net (N). Whether it's a single net lease, double net lease, triple net lease, modified-gross lease, full-service lease, or even a gross lease, these are all indicators of who is responsible for things like insurance, taxes, and common area maintenance. As you can expect, this significantly impacts the total cost of leasing the property. Home & Commercial Inspections, will help navigate the triple net lease inspection process, how it works, and how it can give you greater bargaining power in lease negotiations.

Understanding Triple Net Leases

A triple net lease, also called a triple net or NNN lease, is a type of commercial real estate contract whereby the tenant or lessee is responsible for covering all property expenses. In addition to the price of rent and utilities, this also covers building insurance, real estate taxes, and maintenance. As a result, tenants can accurately budget for both space and operating costs with a triple net lease.
In contrast, the landlord is often responsible for all or part of these payments under regular commercial lease agreements. So, because the tenant is responsible for ongoing expenses, a triple net lease frequently has lower minimum rents than other commercial lease types.

Typical Preventable Triple-Net Lease Problems

Tenants in Columbus, Cleveland, Cincinnati, Toledo, Louisville and Indianapolis may neglect their maintenance obligations or have poor-quality work done on the property to conserve money throughout a lease. Sadly, this may cause the lessee to incur expensive complications at the end of the rental agreement.

Additionally, disagreements concerning the building's condition and other aspects may occur between the landlord and tenant throughout the lease period.

How to Lower Risk for Real Estate Investments and Leases

Understanding the building's overall condition for the lease or rental agreement duration is essential for minimizing the risks connected to triple-net lease investments and rental agreements. You can achieve this by routinely performing a triple-net lease inspection of the property. A neutral professional inspector should carry out the assessment. This is helpful to both the tenant and the landlord.

The landlord may require frequent property inspections from the tenant and a copy of the inspection report in the rental agreement. The inspection report will assure the building owner that the tenant is carrying out their maintenance obligations. Alternately, the tenant may request inspections on their own to better understand the structure's condition and aid in creating a regular maintenance schedule. In the long term, this will not only lower risk but also save a lot of money.