Leasing commercial space is one of the most significant overhead expenses veterinary practices face. While standard leases are common, many landlords offer (or require) what’s known as a triple net lease (NNN). If you’re considering this type of lease for your clinic, it’s essential to understand what you’re agreeing to—and how it can affect your financial planning and long-term success.
At Mahan Law, we help veterinarians review, negotiate, and understand lease agreements tailored to the unique demands of running a veterinary practice. Here’s what you need to know about triple net leases before signing on the dotted line.
What Is a Triple Net Lease (NNN)?
In a triple net lease, the tenant (you) agrees to pay not just base rent, but also three additional “nets”:
- Property Taxes
- Insurance on the Building
- Maintenance and Common Area Expenses (CAM)
This shifts much of the landlord’s traditional cost burden onto the tenant. The base rent in a triple net lease is often lower than in a gross lease, but the additional costs can add up quickly, especially if the building requires major repairs or experiences rising property taxes.
How Does an NNN Lease Differ from Other Lease Types?
There are several types of commercial leases, and understanding the differences is key to making a smart decision:
- Gross Lease: You pay one fixed amount, and the landlord covers taxes, insurance, and maintenance.
- Modified Gross Lease: You pay base rent and some portion of the other costs, depending on the agreement.
- Triple Net Lease: You pay base rent plus all three of the “net” expenses separately.
Veterinary practices may be drawn to the lower base rent of an NNN lease, but if you don’t account for the extra costs, your overhead could be much higher than expected.
What’s Typically Included in NNN Costs?
The three nets are broad categories. Here’s a breakdown of what’s often included:
Property Taxes
You’ll pay your share of the taxes assessed on the property. In a multi-tenant building, this is often calculated based on square footage.
Property Insurance
This refers to the insurance the landlord carries for the building, not your practice’s liability or malpractice insurance. You’ll likely still need to carry your own policies separately.
Maintenance and Common Area Expenses (CAM)
These can include:
- Landscaping and snow removal
- Parking lot maintenance
- Roof repairs
- HVAC maintenance
- Security systems
- Janitorial services for shared areas
It’s important to request a breakdown of what’s included in CAM charges and whether there are caps or limitations.
Why Triple Net Leases Matter for Veterinary Practices
Veterinary clinics have specific operational needs that can make an NNN lease either a strategic choice or a costly mistake:
- Heavy infrastructure demands: Veterinary practices require reliable HVAC systems, plumbing, and electrical capacity. If you’re responsible for repairs, be prepared for potentially expensive upgrades.
- Zoning and permitted use: Not all commercial properties allow medical or veterinary use. Make sure the lease permits animal care, imaging, surgical procedures, and boarding (if applicable).
- Parking and access: Your clients need convenient, accessible parking. CAM fees should cover parking lot maintenance and lighting.
- Signage and visibility: Confirm that signage is allowed and included in your lease area.
- Long-term cost predictability: If the property’s taxes or maintenance costs spike, you could face unexpected increases in rent.
Negotiating a Better Triple Net Lease
Although triple net leases generally favor the landlord, many terms are negotiable. Here’s what we help our clients look for and negotiate:
- Caps on CAM charges: Ask for a ceiling on how much your CAM costs can increase annually.
- Exclusions from maintenance: Try to exclude major capital repairs (like roof or foundation) from your responsibility.
- Audit rights: You should be able to request documentation to verify what you’re being charged for taxes and maintenance.
- Defined responsibilities: Avoid vague language. Ensure the lease clearly outlines what you are and are not responsible for.
- Renewal options and rent increases: Lock in renewal rights and limit how much rent can increase over time.
When reviewing a triple net lease, it’s essential to look beyond the base rent and evaluate the total cost of occupancy.
How Mahan Law Can Help
Triple net leases are complex and often filled with hidden obligations. At Mahan Law, we work with veterinary professionals nationwide to review and negotiate leases that reflect the realities of running a clinic. We can:
- Evaluate NNN lease terms
- Break down projected costs
- Identify red flags or unusual clauses
- Negotiate favorable terms with landlords
- Coordinate with brokers and contractors
Whether you’re opening a new location or relocating an existing practice, we help ensure your lease supports—not threatens—your business goals.
Making the Right Lease Decision for Your Veterinary Practice
Triple net leases aren’t inherently bad, but they do come with added risks and responsibilities. Before you commit to this type of agreement, take time to understand what’s included, how costs are calculated, and whether the terms are fair to your practice.
With the right legal guidance, you can negotiate terms that give your veterinary clinic the space and stability it needs to thrive. Contact Mahan Law today.