Building Better Leases Series – Utilities and Services

Building Better Leases

For reference, a single net lease charges the tenant either for property taxes or insurance as well as for utilities. A double net lease includes both property taxes and insurance as well as utilities. A triple net lease adds all operating costs except structural repairs to the combination of property taxes, insurance and utilities

Utilities includes a broad array of services including, but not limited to: water, gas, heat, light, power, phone, and trash disposal. The Lessee is responsible for paying all of the utilities that service their Premises. Furthermore, in the event that there is an interruption in utilities not within the Lessor’s control (i.e. riots, strikes, accidents), the Lessor is not liable and there is not abatement of Rent available to the Lessee for the extended loss of service. Considering that potential events could last for an extended period of time, Lessees should think about requesting the addition of the right to terminate the Lease if the problem lasts beyond a specific period of time.