Property Management
In Rhode Island, what is 'commercial triple net lease' and who bears operating cost risk?
AA lease where the landlord bears all risk
BA lease where the tenant bears the risk of operating cost increases, paying base rent plus taxes, insurance, and maintenance✓ Correct
CA lease with three-month notice to terminate
DA lease covering three separate commercial spaces
Explanation
In a triple net (NNN) lease, the tenant takes on the risk of operating cost increases by paying taxes, insurance, and maintenance in addition to base rent. Landlords prefer NNN leases because they provide predictable net income.
People Also Study
Related Rhode Island Questions
- Under Rhode Island landlord-tenant law, a landlord must provide notice before entering a tenant's unit for non-emergency maintenance. The required notice is generally:Property Management
- A Rhode Island property manager negotiates a lease renewal for a commercial tenant at a higher rate. This is an example of the manager's duty of:Property Management
- What is a 'triple net lease' (NNN) commonly used in Rhode Island commercial real estate?Property Management
- A Rhode Island property manager wishes to evict a tenant who is not paying rent. After serving the proper notice, where does the manager file the eviction complaint?Property Management
- A Rhode Island commercial property is under a long-term lease below current market rent. How would an appraiser typically account for this?Property Valuation
- A Rhode Island property generates monthly gross rents of $5,000. Operating expenses including maintenance, taxes, and insurance are 40% of gross rents. What is the monthly NOI?Real Estate Math
- A Rhode Island commercial property has annual gross income of $120,000, vacancy loss of 5%, and operating expenses of $45,000. What is the net operating income (NOI)?Real Estate Math
- A Rhode Island property has an annual effective gross income of $84,000, operating expenses of $32,000, and a debt service of $28,000. What is the annual cash flow before taxes?Real Estate Math
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.
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →