What type of lease requires the lessee to cover operating expenses, insurance premiums, and real estate taxes?

A triple net lease is characterized by the lessee being responsible for a multitude of additional costs beyond the base rent. In this type of lease agreement, the tenant (lessee) is required to pay not only the lease amount but also cover operating expenses, insurance premiums, and real estate taxes associated with the property. This ensures that the landlord (lessor) receives rent that is closer to a net operating position, as the lessee assumes many of the costs normally borne by property ownership.

This structure benefits landlords by providing a more predictable stream of income without the fluctuations caused by property-related expenses. It also incentivizes tenants to be more mindful of the property since they bear the direct costs of maintaining it. In contrast, other types of leases, such as gross leases, typically include these expenses within the rental payment, meaning the landlord shoulders those financial burdens.