Collecting Triple Net Leases

[J. Mitchell Bernier]

I’m looking at purchasing a commercial property that is under a True Triple Net Lease for two years. I have never dealt with these leases before but understand the concept. My question is how do you collect the I tax payment and insurance payment? Do most just bill the tenant the full amount when the taxes and insurance are due or do you collect prorated taxes and insurance throughout the year?

[Cason Acor]

Depends on how the lease is written. The common understanding of “true triple net” means that the tenant is paying the taxes, utilities and insurance directly, without any landlord involvement. You also have triple net leases where the landlord pays those expenses and bills them back to the tenant. You’ll want to go over the lease with a fine tooth comb before you submit an offer to know how the expenses are paid.