Encyclopedia
NNN (triple net)
A net lease where the tenant pays property tax, insurance and maintenance costs on top of basic rent. Definitions vary by lease.
For example: A tenant asks for the last few years of operating costs to understand NNN charges. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you lease a shop at a base rent that looks low, under a triple-net lease. In your first year, your share of property tax, insurance and maintenance adds a large amount on top. You would have planned differently if you had asked for the actual cost history first.
What I’d tell a friend
Before you sign a net lease, ask for the last two years of actual additional rent and read exactly what the shared costs include.
Why it matters to you
You pay taxes, insurance and maintenance on top of rent, so your real cost moves every year. Ask what's been passed through in past years, and whether big repairs like a roof can land on you.
How to use it in your deal
Tenants should ask for the last two years of actual operating costs and this year's budget, and add them to basic rent before comparing spaces. Push for exclusions: the landlord's financing, capital replacements charged all at once, management fees on taxes, and costs from other tenants' defaults. Ask for audit rights.
Landlords should keep clean, documented cost pools and reconcile each year on time, because late or messy reconciliations are where disputes start. Buyers should check that recoveries in the rent roll match what the leases actually allow.
Mistakes I see
Comparing basic rent between a net lease and a gross lease. Assuming "triple net" means the same thing in every lease; each lease defines its own exclusions. Missing a clause that lets the landlord charge a new roof to tenants in one year. Ignoring property tax increases after a sale reassessment.
In BC and Vancouver
There's no BC statute defining triple net; the lease wording controls. Property tax is based on BC Assessment values and municipal rates, which you can check yourself.
Official sources: BC Assessment appeal guide · Commercial Tenancy Act (BC Laws) · CanLII (court decisions)
Where the real cost sits
Under a triple-net lease, you usually pay base rent plus your share of the building’s property tax, insurance and maintenance. Those shared costs can move from year to year.
The definitions decide how far that goes. Some leases include major repairs or the roof in shared costs. You can often negotiate caps or exclusions before signing, rarely after.
Questions to ask before you sign
- What were actual operating costs for the last two years?
- What's excluded from additional rent?
- Can capital costs be charged, and how are they spread?
- Is there an admin fee, and on what?
- Can I audit the year-end statement?
Keep reading
Related terms: Net lease, Absolute net lease, Operating costs
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.