What is it?
A commercial lease is classed by who pays costs other than the base rent, such as property tax, building insurance, upkeep and utilities. BDC (the Business Development Bank of Canada) describes them from the tenant’s point of view.
Three kinds
- Gross lease: the tenant pays the landlord one amount that covers the base rent and the other costs.
- Net lease: the tenant pays the base rent plus, typically, one other cost directly (for example property tax). The landlord pays the rest.
- Triple net (NNN): the tenant pays the base rent plus property tax, building insurance, utilities, and operating and maintenance costs. The landlord usually takes on only structural repairs.
- Real leases can differ a little from these names, so read the wording in the lease itself.
Why does it matter for value?
When the landlord’s costs change, net operating income (NOI) changes, and with the same rent the value changes. On a net or triple net lease the landlord’s costs are low, so NOI is close to the rent. Also check that operating costs are really collected from tenants and that the settlement is right.
What the law and official sources say
Quotes are copied word for word. The "In plain words" lines are our explanation, not an official translation.
A type of commercial real estate lease under which you typically pay for one incidental expense directly. In a single net lease, you usually pay the base rent plus property taxes (though in some cases, you might pay for insurance or utilities instead). The landlord pays all other expenses.In plain wordsIn a net lease the tenant pays the base rent plus, typically, one other cost (for example property tax) directly, and the landlord pays the rest. This is written from the tenant’s point of view.
Source: bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/13-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease · checked Nov 2, 2026
A type of commercial real estate lease under which you typically pay the base rent, plus property taxes, building insurance and utilities, as well as other operating and maintenance costs. The landlord assumes no costs, other than those for structural repairs.In plain wordsIn a triple net lease the tenant pays the base rent plus property tax, insurance, utilities and operating and maintenance costs, and the landlord takes on only structural repairs.
Source: bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/13-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease · checked Nov 2, 2026
A type of commercial real estate lease under which you pay a single amount to the landlord that covers base rent and all incidental expenses.In plain wordsIn a gross lease one rent amount includes all the other costs.
Source: bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/13-terms-you-need-to-understand-before-signing-your-commercial-real-estate-lease · checked Nov 2, 2026
Common questions
On a net lease, does the landlord have no costs at all?
No. What the landlord pays differs by lease. Structural repairs, costs while the space is empty, and items that cannot be charged to the tenant may be the landlord’s. Check against the lease and real receipts.
Which is better for the tenant?
It differs by lease. A gross lease fixes the cost in one amount so it is easier to predict. A net lease may have a lower base rent but can cost more if the extra costs rise. Review the wording with a lawyer.
Guides that use this term
Sources checked
- BDC, 13 terms to understand before signing a commercial lease · checked Nov 2, 2026