Who typically pays for property expenses in a net lease?

In a net lease, it is typical for the tenant to assume responsibility for the property expenses. This structure allows landlords to reduce their financial burden and manage risk better. Common expenses covered by tenants in a net lease may include property taxes, insurance premiums, and maintenance costs.

The rationale behind this arrangement is that it gives tenants a greater stake in the maintenance and management of the property, as their operating costs are tied to the upkeep and overall condition of the premises. This often incentivizes tenants to maintain the space better, as they directly bear the costs associated with property management beyond just rent.

Landlords, property managers, and local governments do not typically pay for these expenses under a net lease structure, as their roles are usually defined by other responsibilities such as ownership, oversight, and regulation, respectively.