What is a triple-net (NNN) lease, and what is its typical implication for landlord and tenant?

• A. In an NNN lease, tenant pays base rent plus operating expenses, taxes, and insurance; landlord receives net rent after expenses
• B. In an NNN lease, landlord pays all expenses; tenant pays fixed rent
• C. In an NNN lease, tenant pays base rent only; landlord pays all expenses
• D. In a gross lease, CAM charges are always billed separately from rent

Answer: (A)

In a triple-net lease, the tenant pays base rent plus the major ongoing operating costs—property taxes, insurance, and maintenance (often with CAM charges). This setup means the landlord’s income comes net of those expenses, since the tenant covers them directly. The tenant takes on cost variability from taxes, insurance, and maintenance, while the base rent is typically lower than in other lease types to reflect those pass-through costs.

So the statement that fits best is that the tenant pays base rent plus operating expenses, taxes, and insurance, and the landlord receives net rent after those expenses. The other descriptions describe different lease structures (where the landlord covers expenses or where only base rent is paid) and aren’t characteristic of a triple-net lease.