What is the primary characteristic of a double-net lease?

A double-net lease is characterized by the tenant taking on additional financial responsibilities beyond just paying the base rent. In this type of lease, the tenant is typically responsible for paying operating expenses and property taxes. This arrangement allows landlords to transfer some of the financial burden associated with property management to the tenant, providing a more predictable income stream for the landlord while creating a shared responsibility for property-related costs.

By stipulating that the tenant covers both operating expenses, such as maintenance and utilities, and property taxes, this lease structure helps ensure that the property is well-maintained and that the costs associated with ownership remain manageable for the landlord. The fact that the landlord does not bear these costs in a double-net lease distinguishes it from other types of leases, such as gross leases, where the landlord would cover most expenses. This understanding is crucial for both landlords and tenants in negotiating lease agreements and structuring their financial responsibilities.