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Should You Sign A Triple Net Lease?

Should You Sign A Triple Net Lease?

Whether you are starting a new business or expanding an existing business, one of the biggest expenses besides employees is rent or mortgage for that business. Typically the easiest way to keep costs down is to rent or lease office space. There are many types of lease agreements, but the most common one that insurance brokers run into with their clients is the Triple Net Lease, also known as Net-Net-Net or NNN. This type of lease often requires the tenant to pay not only the rent and normal property expenses, but also the taxes, insurance and other maintenance, utilities and expenses not found on a typical lease. Should you sign a Triple Net Lease? Read on to find out. Standard Lease vs Triple Net Lease In a standard lease the landlord will outline what is expected of the tenant in terms of monthly rent, maintenance and expectations with regard to conduct, insurance, etc. While it may not be specified in the lease agreement, the monthly rent usually includes not only the landlord’s mortgage payment, but also any monthly maintenance and the insurance that the landlord pays for the building. Your monthly rent check covers his expenses. In a Triple Net Lease those expenses aren’t included in the lump sum but are clearly outlined in the lease or rental agreement. The expenses are probably the same as with a standard lease, but you see the numbers for yourself and are paying them as part of the lease payment or in addition to it. Who Purchases & Pays For The Insurance The Triple Net Lease usually requires that the tenant pay...
Commercial Lease Agreement: Insurance Requirements Crash Course for Renters

Commercial Lease Agreement: Insurance Requirements Crash Course for Renters

Ah, the thrill of finally finding the perfect office space. The location is right, the monthly rent is right, even the view is exactly what you hoped for. There’s just one thing standing between you and the keys: the commercial lease agreement. Amidst all the legal jargon about parking spaces and maintenance is the section about insurance requirements. Do you have the right kind? Do you have enough? Be sure to find out before you sign on the dotted line…   Are Those Requirements Really Required? Before a lessor or landlord can require you to provide proof of insurance, they must have a legally insurable interest in the items for which they are requesting coverage. Do they require contents coverage (property insurance)? If the landlord is providing or leasing furnishings or equipment to you (other than the building) they can require proof of contents coverage with them listed as the loss payee. Usually this is not the case, so the landlord cannot require this coverage. It is a good idea to have this coverage anyway, so please consult your insurance broker to find out how to include this coverage in your insurance portfolio. Do they require liability insurance? Some landlords may require that you carry “x” amount of liability insurance, and some may require that you name them as an additional insured on the policy. In the event of an injury on the tenant’s premises a plaintiff’s attorney will often sue the tenant, the landlord and anyone else associated with the premises. If the claimant was injured on your premises or due to your negligence, your landlord will want...