Industrial Property Overview – Fontana, CA

A Triple Net Lease, or NNN lease, is a type of commercial lease where the tenant pays the base rent plus the main costs of operating the property. Instead of the landlord covering those expenses, the tenant usually pays for property taxes, building insurance, maintenance and repairs, and common area maintenance costs. That can include things like parking lot upkeep, landscaping, and other shared areas. In simple terms, a triple net lease means the tenant is taking on more of the property’s ongoing costs, not just paying rent for the space itself.

In this case, NNN refers to the base rent for the space itself. The other costs tied to operating the property are separate and are added on top of that rent each month. Landlords often call these added expenses the “nets,” and they usually include property taxes, building insurance, maintenance and repairs, and common area maintenance fees. So when you lease the space, you are paying both the rent and the operating costs associated with the property.

In addition to the NETs, tenants are also usually responsible for paying their own utility costs separately. These are not included in the rent or the property’s operating expenses and are billed as their own charges. Common utility costs include electricity, gas, and internet service, though the exact setup can vary depending on the property and the lease. In many commercial spaces, tenants should expect these utility expenses to be paid on top of both the base rent and any NET charges, which can have a significant effect on the total monthly cost of the space.

As a tenant, you are usually responsible for the day-to-day care and upkeep of the space you lease. That often includes maintaining the interior areas, such as offices, restrooms, and storage rooms, as well as keeping the space clean, orderly, and in good working condition. Tenants are also typically responsible for repairs related to any improvements or changes they have made to the space, along with smaller maintenance items like replacing light bulbs, changing HVAC filters, and handling other minor issues that come up over time.

In many commercial leases, tenant responsibilities also include maintaining and repairing the HVAC system and taking care of utility-related needs within the space. That can include keeping utility connections in working order and paying separately for services such as electricity, water, and internet. While the exact responsibilities depend on the lease terms, tenants should generally expect to handle the routine interior maintenance and operating needs of their own space.

The landlord is generally responsible for the larger property-wide issues rather than the day-to-day upkeep inside a tenant’s space. This usually includes major structural repairs to the building, such as the roof, foundation, and exterior walls. Landlords also typically handle the maintenance of common areas like parking lots, landscaping, and shared restrooms or walkways.

In many commercial properties, the landlord is also responsible for major building systems and overall property compliance. That can include larger repairs involving HVAC, plumbing, and electrical systems that serve the building as a whole. The landlord also usually carries insurance on the building itself and is responsible for making sure the property meets local building codes and safety requirements. While the exact terms depend on the lease, the landlord usually takes care of the major structural and shared-property responsibilities.

Tenants are usually responsible for carrying the insurance that protects their own business operations and activities inside the leased space. This often includes general liability insurance, which helps cover claims involving bodily injury or property damage that may happen within the tenant’s space. Tenants are also typically responsible for insuring their own personal property, equipment, and inventory kept in the warehouse or commercial unit.

Depending on the lease and the nature of the business, tenants may also need additional coverage. That can include business interruption insurance, which helps protect against lost income if operations are disrupted by a disaster or other unexpected event. In California, tenants are also responsible for carrying workers’ compensation insurance for their employees. Some landlords may also require proof of automotive insurance if the business uses company vehicles on or in connection with the property.

Landlords are usually responsible for insuring the building itself, including the main structure such as the roof, walls, and foundation. They also typically carry liability insurance for common areas, which helps protect against claims involving accidents or injuries that happen in shared spaces like parking lots, hallways, and lobbies.

When it comes to changes inside the leased space, tenants can often make improvements, but landlord approval is usually required first, especially for larger modifications. Structural changes, fixture installation, or major alterations typically need written consent. Smaller cosmetic updates may sometimes be allowed without formal approval, but the lease should always be checked first. In many cases, tenants may also be required to return the space to its original condition at the end of the lease unless a different arrangement has been agreed to in writing.