Property Management

Which of the following is an example of a 'net lease' arrangement?

AThe landlord pays all operating expenses and the tenant pays only base rent
BThe tenant pays base rent plus some or all operating expenses (taxes, insurance, maintenance)✓ Correct
CThe tenant pays a percentage of sales as rent
DThe landlord and tenant split all expenses equally

Explanation

Under a net lease, the tenant pays base rent plus some operating expenses. A single net lease adds taxes; double net adds taxes and insurance; triple net (NNN) adds taxes, insurance, and maintenance.

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