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A triple net lease is a contract signed between a landlord and tenant wherein the tenant is entirely responsible for paying off all the expenses of the lease that is related to a real estate ownership along with the payment of the additional rental amount as mentioned in the lease contract. In other words, the tenant is supposed to pay all the real estate expenses that include taxes related to the property, insurance on the property and maintenance cost of the real property premise. Many times, this type of a lease is also referred to as "net-net-net lease" or a "hell or high water lease". Below are answers to few of the more common legal questions about this type of rental contract: There is a pharmacy in New Jersey that I own for which I need to give a huge rent and it is on hell or high water lease. Do I have the opportunity of breaking the lease without having earned a penalty and is it possible for my landlord to pursue and seize my friends’ personal assets, who has co-signed the lease in support of their company?
The best possible recourse would be to reach a settlement on this with your landlord and then try to find out a new tenant for him in order for your landlord to save money on your breaking the lease before its expiry. However, in case, your landlord chooses to pursue your friends’ personal assets such as cars, furniture and so on, he would not be legally allowed to do so, although, he may be able to attach income, bank accounts, and any real property. Is it legally allowed for a real estate broker to use a hand typed net-net-net lease in Texas, where a potential tenant would have to make payments for all repairs, maintenance, property taxes, and insurance on a residential property? Moreover, the lease does not mention about any return of the tenant’s deposit at its termination.
According to the law in Texas, it is required that every security money that has not been used should have to be given back to a tenant within a period of thirty days from the day he or she has moved out of the rental unit. The same rule applies if the tenant has provided a forwarding address in writing. Apart from this, there is no other law that could prevent this lease from being used in a residential property. What are the benefits of a hell or high water lease agreement?
The largest benefit that a lease like this provides a landlord is that he or she has to collect only the rent and do nothing more than that. The landlord is not held responsible for doing any repair, maintenance or any type of improvements on the property. Since there is no expenditure on the repair and maintenance of the property, the landlord is able to save a huge amount of money that comes from the rent. Moreover, he is benefitted from the tenant improvements done on the property and its premises without having spent a single penny out of pocket. This type of a lease is undoubtedly advantageous to the landlords, but in some cases, a tenant can also enjoy its benefits by having more control over the property. This would provide them with a provision of reorganizing items by offering them a liberty to add more things on to the property and decorate and maintain the place according to their own will. Moreover, zero capital investment benefit is what a tenant can gain from this lease as they can save themselves from purchasing their own property. The tenants are also aware of their monthly rent amount as the lease would provide them with detailed information on how much the increment would increase and at what intervals the payments would need to be made. This could possibly let them to have more control over the returns. If you need any clarification about your particular situation on the subject, you may wish to ask a real estate lawyer for legal insight based on an expert evaluation of your circumstances.
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