When leasing real estate, the key question is often: who pays the bill? In practice, this is reflected in single net, double net and triple net leases—terms that indicate the extent to which costs and obligations associated with the property, such as taxes, insurance and maintenance, are passed on to the tenant. The further one moves towards a triple net structure, the more responsibilities are allocated to the tenant.
In the context of logistics real estate, this often seems a natural approach. These properties typically have a single tenant, using the entire premises for its own operations. Moreover, such assets are usually located along motorways or at the edges of urban areas, rather than in highly visible city-centre locations. Unlike inner-city real estate, landlords are less likely to pass by regularly and often do not own other nearby properties.
In addition, logistics tenants are typically professional parties that tailor the property specifically to their operational needs. In such circumstances, it is logical that the associated costs and responsibilities are, as far as possible, allocated to the tenant. This makes a triple net structure a natural fit for the leasing of logistics real estate.
Why the term “triple net” falls short legally
However, this is also where an important legal risk arises. In practice, it is still too often assumed that simply using the label “triple net” is sufficient to allocate all obligations to the tenant. In reality, “triple net” is not a legally defined term, but rather a market concept without a fixed legal meaning.
Case law consistently shows that courts are unwilling to accept that the mere inclusion of the term “triple net” is sufficient to pass all costs and obligations on to the tenant. If parties intend to do so, this must be explicitly reflected in the lease agreement.
The interpretation of a triple net clause is assessed on the basis of the so-called Haviltex standard. This means that what matters is not only the wording of the contract, but also what the parties could reasonably expect from each other in the given circumstances. The context, the nature of the property and the conduct of the parties before and after concluding the agreement all play a role. Without clear agreements, there is ample scope for differing interpretations and disputes.
Clear drafting prevents disputes: specify the triple net clause
A triple net structure therefore only works effectively if it is clearly defined which costs and obligations fall within its scope. If a landlord intends for the tenant to bear, for example, property taxes, insurance costs and expenses for major maintenance and replacements, this must be set out clearly and unambiguously.
Failing to do so creates uncertainty and increases the likelihood of disputes.
For landlords of logistics real estate, the message is clear: a triple net structure fits well within this market and can offer significant advantages, but the concept itself has limited legal value. Only a carefully drafted lease agreement ensures that the intended allocation of costs and responsibilities will hold in practice. In short: consider a triple net structure—but do not rely on the label alone.
