Triple Net Lease

REAL ESTATE LEASE
(NNN Lease)

This LEASE AGREEMENT (this “Lease”) is dated as of [INSERT DATE], by and between Party 1 (the “Landlord”) and Party 2 (the “Tenant”). The Parties agree as follows:

Premises. Landlord, in consideration of the lease payments provided for in this Lease, leases to Tenant the property located at [INSERT ADDRESS] (the “Premises”), and more fully described in the legal description of the Premises attached as Exhibit A.
Term. The lease term will commence on [INSERT DATE] and will terminate on [INSERT DATE]. Upon vacating the Premises, Tenant hereby agrees to return same in as good repair and “broom cleaned” condition as of the commencement date of the Lease, acceptable to Landlord’s designated representative.
Triple Net Lease. This Lease is what is commonly referred to as a “Triple Net Lease,” it being the intention of the Parties hereto that Landlord shall not have any responsibility of any kind or nature whatsoever to maintain, repair, improve, alter, or in any way incur any expense in connection with the Premises, and that the rent and other payments to be made by Tenant to or on behalf of Landlord under the terms hereof, are to be free and clear of any impositions, expenses, or setoffs of any kind or nature whatsoever, including without limitation, any taxes, charges, or expenses in connection with the ownership, maintenance, repair and operation of the Premises, all such expenses, charges, and taxes to be paid by Tenant as provided herein.

Tenant shall pay for all water, gas, heat, light, power, telephone, and other utilities and services supplied to the Premises, together with any taxes thereon and a proportionate share of real property taxes, all risk and earthquake insurance, and common area maintenance expenses. If any such services are not separately metered to Tenant, Tenant shall pay a reasonable, proportionate share as determined by Landlord of all charges jointly metered with other Premises.
Lease Payments. Tenant shall pay to Landlord monthly installments of $[NUMBER], payable in advance on the first day of each month. Lease payments shall be made to the Landlord at [INSERT ADDRESS], or such other address as designated in writing by Landlord.
Estimated Payments. Landlord shall notify Tenant of Estimated Payments for taxes, insurance, maintenance of the landscaping and parking lot, and landscaping and parking lot utilities and services from time to time. The Estimated Payments shall be paid by Tenant together with rent on the first day of each month throughout the Term. The Estimated Payments may be increased or decreased by Landlord upon written notice to Tenant based upon statements received or charges incurred by Landlord, information available to Landlord as to the probable cost of expected charges and expenses, or the reasonable estimate of Landlord as to the probable amount of expected charges or expenses. Landlord shall be entitled to retain the monies received from such payments in its general fund pending payment of all such costs and charges. No more frequently than once each calendar quarter, the actual costs shall be determined by Landlord, and Tenant shall remit to Landlord on demand its unpaid pro rata share of the actual expense. In the event Tenant overpaid the actual expenses for such period of time, Landlord shall apply such overpayment towards the next Estimated Payments owing by Tenant. At the termination of the Lease, an accounting for such charges and expenses shall be made to the nearest practical accounting period, and Tenant shall pay to Landlord any balance due, or the Landlord shall refund to Tenant any excess amount paid.
Security Deposit. At the time of signing of this Lease, Tenant shall pay to Landlord, in trust, a security deposit of $[NUMBER] to be held and disbursed for Tenant damages to the Premises (if any) as provided by law.
Possession. Tenant shall be entitled to possession on the first day of the term of the Lease, and shall yield possession to Landlord on the last day of the term of the Lease, unless otherwise agreed by both Parties in writing. At the expiration of the Term, Tenant shall remove its goods and effects and peaceably yield the Premises to Landlord in as good a condition as when delivered to Tenant, ordinary wear and tear excepted.
Alterations. Tenant covenants and agrees that all alterations constructed on the Property or work performed or caused to be performed by Tenant shall be in full compliance with all laws, rules, order, ordinances, directions, codes, regulations, and requirements of all governmental agencies, offices, departments, bureaus and boards having jurisdiction over the Property. Tenant shall provide Landlord with at least [NUMBER] days’ notice prior to having any construction materials delivered to the Property or commencing any construction of any improvements, and shall reasonably cooperate with Landlord in the posting of a notice of non-responsibility.
Cost of Alterations. Tenant shall pay all costs of constructing any such alterations approved by Landlord including but not limited to fees and costs charged by architects, engineers, the general contractor, subcontractors, and laborers and material men, and shall not permit any mechanic’s or materials men’s liens to be filed against the Property in connection therewith.
Furnishings. The following furnishings will be provided: [________________]. Tenant shall return all such items at the end of the Lease in a condition as good as the condition at the beginning of the Lease Term, except for such deterioration that might result from normal use of the furnishings.
Parking. Tenant shall be entitled to use [NUMBER] parking space(s) for the parking of Tenant’s employees, customers, or guests.
Property Insurance. Tenant shall maintain casualty property insurance on the Premises and all improvements against loss or damage by fire and lightning and against loss or damage by other risks in an amount not less than $[NUMBER]. Landlord shall be named as an additional insured in such policies. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies reasonably satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies. All insurance proceeds payable by the occurrence of any covered loss shall be payable to Landlord, and Tenant shall have no right or claim to any such insurance proceeds payable with respect to Improvements, excluding, however, any such proceeds that may be payable with respect to Tenant’s personal property or trade fixtures.

Tenant shall also maintain any other insurance that Landlord may reasonably require for the protection of Landlord’s interest in the Premises. Tenant is responsible for maintaining casualty insurance on its own property.
Liability Insurance. Tenant shall maintain liability insurance on the Premises in a total aggregate sum of at least $[NUMBER]. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies reasonably satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies.
Renewal Terms. This Lease shall automatically renew for an additional period of [______________] per renewal term, unless either party gives written notice of termination no later than [NUMBER] days prior to the end of the term or renewal term. The Lease terms during any such renewal shall be the same as those contained in this Lease except that the lease installment payments shall be $[NUMBER] per month.
Maintenance. Tenant shall have the responsibility to maintain the Premises in good repair at all times during the term of this Lease.
Utilities and Services. Tenant shall be responsible for all utilities and services incurred in connection with the Premises.
Taxes. Taxes attributable to the Premises or the use of the Premises shall be allocated as follows:

a. Real Estate Taxes. Tenant shall pay all real estate taxes and assessments which are assessed against the Premises during the time of this Lease. Real Property Taxes shall include any form of assessment, license, fee, rent, tax, levy, penalty, or tax imposed by any authority having the direct or indirect power to tax, including any improvement district, as against any legal or equitable interest of Landlord in the Premises or as against Landlord’s business of renting the Premises. Tenant’s share of Real Property Taxes shall be prorated to cover only the period of time within the fiscal tax year during which the Lease is in effect. With respect to any assessments which may be levied against or upon the Premises, and which may be paid in annual installments, only the amount of such annual installments (with appropriate proration for any partial year) and interest due thereon shall be included within the computation of the annual Real Property Taxes. Landlord represents that, to the best of his or her knowledge, there are no assessment or improvement districts being planned which would affect the Premises other than as in effect as of the date of this Lease.
b. Personal Taxes. Tenant shall pay all personal taxes and any other charges which may be levied against the Premises and which are attributable to Tenant’s use of the Premises, along with all sales and/or use taxes (if any) that may be due in connection with lease payments. Accordingly, Tenant shall pay before delinquency all taxes levied or assessed on Tenant’s fixtures, improvements, furnishings, merchandise, equipment, and personal property in and on the Premises, whether or not affixed to the real property. If Tenant in good faith contests the validity of any such personal property taxes, then Tenant shall at its sole expense defend itself and Landlord against the same and shall pay and satisfy any adverse determination or judgment that may be rendered thereon. Tenant shall indemnify Landlord against liability for any such taxes and/or any liens placed on the Premises in connection with such taxes. If at any time after any tax or assessment has become due or payable Tenant or its legal representative neglects to pay such tax or assessment, Landlord shall be entitled, but not obligated, to pay the same at any time thereafter and such amount so paid by Landlord shall be repaid by Tenant to Landlord with Tenant’s next rent installment together with interest at the highest rate allowable by law.
Termination Upon Sale of Premises. Notwithstanding any other provision of this Lease, Landlord may terminate this lease upon [NUMBER] days’ written notice to Tenant that the Premises have been sold.
Termination Clause. Tenant may, upon [NUMBER] days’ written notice to Landlord, terminate this Lease provided that the Tenant pays a termination charge equal to [NUMBER] months’ rent or the maximum allowable by law, whichever is less. Termination will be effective as of the last day of the calendar month following the end of the [NUMBER] day notice period. Termination charges will be in addition to all rent due up to the termination day.
Destruction or Condemnation of Premises. If the Premises are partially destroyed by fire or other casualty to an extent that prevents the conducting of Tenant’s use of the Premises in a normal manner, and if the damage is reasonably repairable within sixty days after the occurrence of the destruction, and if the cost of repair is less than $[NUMBER], Landlord shall repair the Premises and a just proportion of the lease payments shall abate during the period of repair according to the extent to which the Premises have been rendered untenantable. However, if the damage is not repairable within sixty days, or if the cost of repair is greater than $[NUMBER], of if Landlord is prevented from repairing the damage by forces beyond Landlord’s control, or if the property is condemned, this Lease shall terminate upon twenty days’ written notice of such event of condition by either party and any unearned rent paid in advance by Tenant shall be apportioned and refunded. Tenant shall give Landlord immediate notice of any damage to the Premises.
Defaults. Tenant shall be in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound. Subject to any governing provisions of law to the contrary, if Tenant fails to cure any financial obligation within five (5) days (or any other obligation with 10 days) after written notice of such default is provided by Landlord to Tenant, Landlord may take possession of the Premises without further notice (to the extent permitted by law), and without prejudicing Landlord’s rights to damages. In the alternative, Landlord may elect to cure any default and the cost of such action shall be added to Tenant’s financial obligations under this Lease. Tenant shall pay all costs, damages, and expenses (including reasonable attorney’s fees and expenses) suffered by Landlord by reason of Tenant’s defaults. All sums of money or charges required to be paid by Tenant under this Lease shall be additional rent, whether or not such sums or charges are designated as “additional rent.” The rights provided by this paragraph are cumulative in nature and in addition to any other rights afforded by law.
Late Payments. Payments received after the time due (and after the passage of any applicable cure period) shall be subject to a late fee of $[NUMBER].
Holdover. If Tenant maintains possession of the Premises for any period after the termination of this Lease (the “Holdover Period”), Tenant shall pay to Landlord lease payment(s) during the Holdover Period at a rate equal to the normal payment rate set forth in the Renewal Terms paragraph.
Non-Sufficient Funds. Tenant shall be charged $[NUMBER] for each check that is returned to Landlord for lack of sufficient funds.
Remodeling or Structural Improvements. Tenant shall have the obligation to conduct any construction or remodeling (at Tenant’s expense) that may be required to use the Premises as specified above. Tenant may also construct such fixtures on the Premises (at Tenant’s expense) that appropriately facilitate its use for such purposes. Such construction shall be undertaken and such fixtures may be erected only with the prior written consent of the Landlord which shall not be unreasonably withheld. Tenant shall not install awnings or advertisements on any part of the Premises without Landlord’s prior written consent, such consent not to be unreasonably withheld.
Access by Landlord to Premises. Subject to Tenant’s consent (which shall not be unreasonably withheld), Landlord shall have the right to enter the Premises to make inspections, provide necessary services, or show the unit to prospective buyers, mortgagees, tenants, or workers. However, Landlord does not assume any liability for the care or supervision of the Premises. As provided by law, in the case of an emergency, Landlord may enter the Premises without Tenant’s consent. During the last three months of this Lease, or any extension thereof, Landlord shall be allowed to display the usual “To Let” signs and show the Premises to prospective tenants.
Indemnity Regarding Use of Premises. To the extent permitted by law, Tenant agrees to indemnify, hold harmless, and defend Landlord from and against any and all losses, claims, liabilities, and expenses, including reasonable attorney fees, if any, which Landlord may suffer or incur in connection with Tenant’s possession, use or misuse of the Premises, except Landlord’s act of negligence.
Dangerous Materials. Tenant shall not keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might substantially increase the danger of fire on the Premises, or that might be considered hazardous by a responsible insurance company, unless prior written consent of the Landlord is obtained and proof of adequate insurance protection is provided by Tenant to Landlord. However, Tenant shall be entitled to use and store only those Hazardous Materials that are necessary for Tenant’s business, provided that such usage and storage is in full compliance with all applicable local, state, and federal statutes, orders, ordinances, rules, and regulations (as interpreted by judicial and administrative decisions). Tenant shall not keep or store on the Premises chemicals in quantities, amounts, concentrations, or type which are in excess of those permitted by local, state or federal laws, regulations, or ordinances.
Compliance with Regulations. Tenant shall promptly comply with all laws, ordinances, requirements, and regulations of the federal, state, county, municipal, and other authorities, and the fire insurance underwriters. However, Tenant shall not by this provision be required to make alterations to the exterior of the building or alterations of a structural nature.
Mechanic’s Liens. Neither the Tenant nor anyone claiming through the Tenant shall have the right to file mechanic’s liens or any other kind of lien on the Premises and the filing of this Lease constitutes notice that such liens are invalid. Further, Tenant agrees to (1) give actual advance notice to any contractors, subcontractor, or suppliers of goods, labor, or services that such liens will not be valid, and (2) take whatever additional steps that are necessary in order to keep the premises free of all liens resulting from construction done by or for the Tenant.
Subordination of Lease. This Lease is subordinate to any mortgage that now exists, or may be given later by Landlord, with respect to the Premises.
Assignability / Subletting. Tenant may not assign or sublease any interest in the Premises, nor effect a change in the majority ownership of the Tenant (from the ownership existing at the inception of this Lease), nor assign, mortgage, or pledge this Lease, without the prior written consent of Landlord, which shall not be unreasonably withheld.
Governing Law. The Lease shall be construed in accordance with the laws of the State of [NAME OF STATE].
Entire Agreement. This Lease contains the entire agreement of the Parties and there are no other promises, conditions, understandings, or other agreements, whether oral or written, relating to the subject matter of this Lease. This Lease may be modified or amended in writing, if the writing is signed by both Parties.
Severability. If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
Waiver. The failure of either party to enforce any provisions of this Lease shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of the Lease.
Binding Effect. This Lease shall be binding upon and inure to the benefit of both Parties and their respective successors and assigns.

Signatures and Notice. No notice under this Lease shall be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed to the Parties below:

[NAME OF TENANT]

________________

By: _____________

[NAME OF LANDLORD]

________________

By: _____________