Illinois Real Estate Practice Exam

Which lease requires paying two of the charges as well as a base amount?

1. Net Lease

2. Percentage Lease

3. Double Net Lease

4. Index Lease

The correct answer is: Double Net Lease

The correct answer is indeed the option that refers to a Double Net Lease. In a Double Net Lease, the tenant is responsible for paying not just the base rent but also two additional charges—typically property taxes and insurance. This arrangement means that the landlord retains responsibility for structural maintenance, while the tenant handles these specific costs, providing a balance of responsibility between landlord and tenant. Understanding the structure of a Double Net Lease is crucial for both landlords and tenants, as it clearly defines the obligations of both parties. This lease type is often favored in commercial real estate transactions, as it allows landlords to reduce their financial risks while still generating rental income from the property. The other lease types mentioned have different structures; some may involve varying degrees of tenant responsibilities but do not specifically require the payment of two additional charges alongside a base rent in the same manner as a Double Net Lease does.