Absolute Triple Net Lease
Also known as a bondable lease. An extreme variation of a net lease ( www.practicallaw.com/9-502-3983) , where the tenant is typically responsible for all, or most, of the risks related to the real property. A tenant is usually responsible for all of the costs typically found in a triple net lease ( www.practicallaw.com/9-502-4020) and certain additional risks.
The economic terms may vary depending on the negotiated lease, but in most instances, the rent is absolutely net under all circumstances. Typically an absolute triple net lease is not terminable by the tenant and rent abatements are not permitted. For example, a tenant must:
Rebuild the leased premises after a casualty, regardless of the adequacy of insurance proceeds.
Continue paying rent after a partial or full condemnation of the leased premises.
An absolute triple net lease would be typically used in a sale leaseback ( www.practicallaw.com/0-382-3783) arrangement.