Net Lease

Understand net leases in Canadian commercial real estate: how they work, what tenants pay, and why they matter to landlords and investors.

Net Lease

June 16, 2025


What is a Net Lease?

A net lease is a type of commercial lease where the tenant pays base rent plus one or more additional operating expenses such as property taxes, insurance, or maintenance.

Why Net Leases Matter in Real Estate

In Canadian commercial real estate, net leases shift certain property expenses to tenants, reducing financial responsibility for landlords while offering predictable occupancy costs.



Common types of net leases:
  • Single Net (N): tenant pays property taxes
  • Double Net (NN): tenant pays taxes and insurance
  • Triple Net (NNN): tenant pays taxes, insurance, and maintenance



Net leases are popular in retail and industrial spaces and are often used for long-term leases with corporate tenants.



Understanding net lease structures helps both landlords and tenants negotiate fair, transparent agreements aligned with investment goals.

Example of a Net Lease in Action

The tenant signs a triple net lease, agreeing to cover all property taxes, insurance premiums, and maintenance for the warehouse space.

Key Takeaways

  • Tenant pays rent plus property expenses
  • Varies by number of responsibilities (N, NN, NNN)
  • Common in retail, industrial, and office leases
  • Reduces landlord risk and costs
  • Requires detailed agreement documentation

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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