Net-Net-Net Lease

Anyone have a definitive interpretation of the term "Net-Net-Net Lease"? We're dealing with an old Form 50 commercial lease for a store in a shopping center, which has typed in a space near the end thereof "This is a Net-Net-Net Lease." The term is not otherwise used or defined in the lease, nor is there any type of CAM provision spelling out what percentage of the total square footage in the center is allocable to the store, or any other sort of formula for allocating common expenses to the leased premises.

However, this being a Form 50 lease, there is also the preprinted language on the first page requiring the tenant to pay increases in taxes and water/sewer rents over the base year amounts, and increases in insurance premiums IF due to the tenant's activities. Normally a typed provision might trump a conflicting preprinted provision, BUT the preprinted provisions were manually modified by striking out selected portions thereof. It's clear the parties didn't gloss over preprinted boilerplate, but I'm not sure how the modified preprinted provisions can be reconciled with the typed provision.

Another factor which may have a bearing on the interpretation of the lease is the fact that the lease with our tenant client was signed by the previous owner as landlord, and he never billed for anything other than the base rent, never even asking for a portion of increased taxes and utilities under the preprinted portions of the lease. However, after several years he sold to the present landlord, who claims the "Net-Net-Net" provision governs, and each tenant owes a percentage (calculated by him) of ALL the taxes, insurance, utilities, maintenance, etc. An eviction notice has just been served on our client for failure to pay the amounts claimed by the new landlord.

We've all heard the term "triple net" (which may or may not be the equivalent of "Net-Net-Net"), but I've never seen a lease just use the term and let it go at that, without further defining the concept. Any thoughts on what the new landlord is legitimately entitled to in this situation? TIA.

Steve

Steven J. Proctor, Esq.
Binder, Kalis & Proctor, P.C.
1035 E. High St.
Pottstown PA 19464
610-323-6200
Fax 610-970-2082

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