Property Management
What is a 'triple net lease' (NNN) and how is it typically used in Pennsylvania commercial real estate?
AA residential lease requiring the tenant to pay all utilities in addition to base rent
BA commercial lease where the tenant pays base rent plus three operating expenses: property taxes, insurance, and maintenance✓ Correct
CA lease with three separate renewal options at different rates
DA Pennsylvania-specific lease structure requiring three months' security deposit
Explanation
In a triple net (NNN) lease, the tenant pays base rent plus a proportionate share of: (1) real estate taxes, (2) building insurance, and (3) maintenance/operating expenses. NNN leases shift operating cost risk to tenants and are commonly used in Pennsylvania retail, office, and industrial properties.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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