In real estate, a net lease is a lease agreement in which the tenant is responsible for paying certain operating expenses of the property in addition to a fixed base rent. These expenses commonly include property taxes, insurance premiums, and maintenance or operating costs.
Net leases are frequently used in commercial real estate and may take different forms depending on how many expenses the tenant assumes. By shifting some or all property costs to the tenant, a net lease provides the landlord with more predictable net income while allocating greater responsibility to the tenant.
