triple-net-lease

# Triple Net Lease (NNN)

Produces a transaction-ready NNN commercial lease with precise expense allocation, remedies, and execution mechanics.

## Prerequisites

Collect before drafting:

1. **Parties** — legal names, entity types, formation states, authorized signatories.
2. **Premises** — address, suite/unit, RSF (BOMA standard), legal description, APN, parking/common-area rights.
3. **Term Sheet / LOI** — rent schedule, escalations, TI allowance, concessions, renewal/expansion options.
4. **Property Context** — single- vs multi-tenant; CAM structure; CC&Rs; exclusive-use limits.
5. **Use & Compliance** — permitted use, zoning confirmation, licensing, ADA allocation.
6. **Insurance Targets** — coverages, limits, carrier ratings (A.M. Best), additional insureds.
7. **Finance / Title** — lender requirements, SNDA, subordination expectations.
8. **Exhibits** — site plan, rules/CAM, work letter, estoppel form, SNDA form.

## Quick Start

1. Complete the deal intake table below — flag any gaps before drafting.
2. Assemble clauses in the prescribed draft order.
3. Populate the maintenance matrix and insurance schedule.
4. Fill default/cure periods per jurisdiction.
5. Run the pre-execution checklist before circulating.

## Deal Intake Table

| Field | Required Detail | Source |
|---|---|---|
| Parties | Names, entity type, formation state, signatories | Formation docs, LOI |
| Premises | Address, suite, RSF, legal description, APN | Title, survey, deed |
| Term | Commencement trigger, expiration, options | LOI |
| Base Rent | Annual/monthly, payment method, proration | LOI |
| Escalations | Fixed %, CPI index/base, FMV process | LOI |
| Concessions | Free rent, TI allowance, recapture | LOI |
| NNN | Taxes, insurance, maintenance, CAM | LOI |
| Use | Permitted use, prohibited uses | LOI |
| Alterations | Consent standard, ownership, restoration | LOI |
| Assignment | Consent standard, recapture, liability | LOI |
| Defaults | Notice/cure, remedies, mitigation | Jurisdiction |
| Exhibits | List and status | Deal file |

## Draft Assembly Order

1. Definitions and premises
2. Term and rent schedule
3. NNN expenses and reconciliation
4. Maintenance matrix
5. Use, compliance, and alterations
6. Transfers and subletting
7. Insurance and risk allocation
8. Defaults and remedies
9. Miscellaneous / boilerplate
10. Exhibits and signature blocks

## Core Clause Checklist

- [ ] **Premises** — legal description; RSF standard; parking and signage rights
- [ ] **Term** — commencement trigger; delivery condition; commencement certificate
- [ ] **Base Rent** — due date, method, proration formula
- [ ] **Escalations** — fixed/CPI/FMV; caps/floors; process timeline
- [ ] **NNN Expenses** — taxes, insurance, maintenance; pay-direct vs reimburse
- [ ] **CAM** — allocation formula, exclusions, audit rights, reconciliation timing
- [ ] **Insurance** — coverages, limits, carrier rating, additional-insured language, certificates
- [ ] **Maintenance** — tenant vs landlord responsibilities; capital items
- [ ] **Use / Compliance** — permitted use; zoning; permits; ADA allocation
- [ ] **Alterations** — consent standard; contractor requirements; ownership
- [ ] **Assignment / Subletting** — consent standard; criteria; recapture; profit split
- [ ] **Default / Remedies** — notice/cure; mitigation; fees; acceleration limits
- [ ] **Indemnity** — carve-outs for landlord negligence where required
- [ ] **Casualty / Condemnation** — rent abatement; termination rights
- [ ] **SNDA / Attornment** — lender protections and non-disturbance
- [ ] **Notices** — methods, deemed receipt, address changes
- [ ] **Execution** — authority, notary/witness if required

## Maintenance Responsibility Matrix

Insert as exhibit or inline section. Assign each item to tenant or landlord.

| Item | Tenant | Landlord | Notes |
|---|---|---|---|
| Roof | ☐ | ☐ | Caps or thresholds? |
| Foundation | ☐ | ☐ | Structural only |
| Exterior walls | ☐ | ☐ | Load-bearing? |
| HVAC | ☐ | ☐ | Service contract required |
| Plumbing | ☐ | ☐ | Serving premises |
| Electrical | ☐ | ☐ | Panels, lighting |
| Interior | ☐ | ☐ | Floors, walls, finishes |
| Parking / Drive | ☐ | ☐ | If exclusive |

## Insurance Schedule

| Coverage | Limits | Additional Insureds | Notes |
|---|---|---|---|
| CGL | $___ per occ / $___ agg | Landlord, lender | Primary / noncontributory |
| Property | Replacement cost | Loss payee as needed | Tenant property / TI |
| Umbrella | $___ | Landlord, lender | If required |
| Workers' Comp | Statutory | N/A | If employees |
| Special | Liquor / pollution / prof | As needed | Use-specific |

## Default and Cure Framework

- **Monetary default**: ___ days after written notice.
- **Non-monetary default**: ___ days after written notice; extendable if cure commenced and diligently pursued.
- **Repeat default**: no cure for repeated defaults within ___ months.
- **Remedies**: termination, re-entry, reletting, damages, costs, fees, interest at max lawful rate.
- **Mitigation**: include or exclude per jurisdiction.

## Standard Exhibits

- A — Legal description
- B — Site plan / premises plan
- C — Rules and regulations / CAM detail
- D — Work letter / TI specs
- E — Estoppel certificate form
- F — SNDA form
- G — Rent schedule / escalation grid

## Pre-Execution Checklist

- [ ] All blanks completed or bracketed
- [ ] Rent schedule and escalation math verified
- [ ] NNN allocations align with CAM definitions
- [ ] Notice addresses confirmed
- [ ] Certificates of insurance ready
- [ ] SNDA form approved by lender
- [ ] Authority documents for signatories

## Pitfalls

- Use **specific permitted-use language**; avoid vague "retail/office" unless intentional.
- Confirm **statutory notice/cure periods** and **mitigation duties** in the property's state.
- Jury trial waivers require **conspicuous formatting** and local enforceability review.
- Do not draft indemnity that violates **anti-indemnity statutes** (landlord negligence carve-outs).
- Late-payment interest must not exceed the **maximum lawful rate** for the jurisdiction.
- In multi-tenant properties, **exclude capital improvements from CAM** unless amortized.
- Clarify **tax appeal rights** and allocation of savings/costs.
- If term exceeds local recordation thresholds, include a **recording memorandum** with notary requirements.
- Run a **defined-term audit** — verify all definitions and cross-references are consistent.