BOMA Foundations Practice Exam

The triple net lease is recognized as the most common type of net lease primarily due to its structure and the benefits it offers to both landlords and tenants. In a triple net lease, the tenant is responsible for covering three key expenses: property taxes, insurance, and maintenance costs. This arrangement alleviates a significant financial burden from the landlord, making such leases attractive for property investors because they can expect a more stable income without the fluctuations that might arise from these additional costs.

From the tenant's perspective, a triple net lease can also provide a clearer understanding of operating expenses associated with a property. Since the tenant has the responsibility for these costs, they may take a more active role in the management and upkeep of the property, which can lead to a more favorable overall condition of the asset. This arrangement aligns the interests of both parties and contributes to the popularity of triple net leases in commercial real estate, particularly for retail and industrial properties.

In contrast, the other lease types, such as single or double net leases, transfer fewer responsibilities to the tenant, thus attracting a different level of risk and management involvement for landlords. Full-service leases typically include all expenses in the rent and are more common in office spaces, catering to tenants who prefer a straightforward budgeting process