At the end of each year the landlord will compare the

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monthly rent.  At the end of each year the landlord will compare the actual expenses with the  estimated expenses.  If the landlord has spent more than estimated the tenant will receive a bill  for the difference which is to be paid immediately.  The Triple Net Lease is usually found in retail  situations or in single tenant properties.   The quoted rate does not include the cost of taxes,  insurance or CAM. The Full Service lease is similar to the Gross lease except it contains provisions to pass  on escalating costs to the tenant.   The landlord quotes a rate that includes paying the taxes,  insurance premiums, utilities, and CAM.  In order to protect himself from escalating costs the  landlord will include either a base year or expense stop.  To understand Full Service leases it is  imperative that one understand these concepts.  In a base year approach the landlord represents that the quoted rate will include the costs  that were incurred for taxes, insurance and CAM equal to what was spent in a given year.  The  year could be last year, this year or next year.  Which one is used often depends on the time of the  year that the lease is signed.   Note that the landlord and tenant will not know at the time of 
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  • Spring '11
  • Abner
  • tenant, landlord, triple net lease, insurance  premiums

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