A double net lease (also known as a net-net or NN lease) is a lease agreement in which the tenant is responsible for paying two of the three typical net costs — property taxes, building insurance, and maintenance — in addition to base rent.
The landlord and tenant can decide which two costs the tenant will cover, but typically it’s property taxes and building insurance. The landlord remains responsible for any costs associated with maintenance or structural repairs to the building.
Double net leases are more common in commercial real estate than in residential real estate. They can benefit the tenant by potentially providing lower base rent, since the tenant takes on more of the property expenses. On the other hand, they can also benefit the landlord by reducing their financial responsibility for the property.
It’s essential for both parties to clearly understand the terms of a double net lease, as the additional costs can be substantial and unexpected expenses can arise.