What does triple net actually shift?

The three nets are property taxes, building insurance and maintenance — the tenant pays those on top of base rent. What it shifts is the COST, and sometimes the placement. It does not shift ownership of the building, and it does not shift liability for the parts of the property you still control or for your own acts as owner. Read your lease closely on one point in particular: whether the tenant merely reimburses you for insurance you place, or actually places the policy themselves. Those are very different positions and the paperwork often blurs them.

My tenants all carry general liability. Why do I need mine?

Because their policy exists to protect them, not you. Three things go wrong with relying on it. You are named as a defendant regardless of fault and your defense costs begin at once. Their policy can lapse, be cancelled or be exhausted by another claim without anyone telling you. And claims arising from things YOU control — the roof, the structure, the parking lot, the common stairs — are yours, not theirs. Additional insured status on their policy is worth having and is a supplement to your own cover, never a replacement.

The tenant places the building policy. What should I check?

That you are a named insured, that the limit reflects rebuild cost rather than the tenant’s interest, that the valuation is replacement cost, that ordinance or law is included on an older building, that your lender is named as mortgagee, and that you receive notice of cancellation. Then check it again every year. Landlords who set this up correctly at signing and never look at it again are the ones who discover at a claim that the policy changed three renewals ago.

Does a NNN lease change who insures tenant improvements?

It should say, and frequently it does not — which is one of the most common gaps in net-leased property. Improvements and betterments installed by a tenant can be insured by either party depending on the lease and on who is treated as owning them at the end of the term. If both policies exclude them, a fit-out worth several hundred thousand is uninsured. Settle it in the lease and make sure the two policies match what the lease says.

On a triple net lease, does the tenant insure the building — and do I still need my own cover?

The tenant usually pays for the building insurance and often places it, and you still need your own liability cover. Those two facts sit uncomfortably together and the second one is where landlords get hurt: a NNN landlord who reasons "all my tenants carry GL, so I do not need any" has confused who pays with who is liable. You get named in the suit regardless, your defense costs start immediately, and the tenant’s policy is written to protect the tenant.

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The detail

A landlord relying entirely on tenants’ general liability because the lease is triple net is a common and mistaken position: the landlord remains a defendant, funds their own defense, and has no control over the tenant’s policy remaining in force.
Kevin Kelsey, agency placement experience

What this means for you

Carry your own general liability whatever the lease says. Being reimbursed for premium is not the same as being insured, and the defense costs land on you on day one.
If the tenant places the building cover, verify it annually — you are relying on a policy you do not control, on an asset you own.
Be a NAMED INSURED on the property policy where the tenant places it, not merely a loss payee or certificate holder. Only a named insured can make a claim.
Make sure the lender is on it too. A mortgagee clause missed on a tenant-placed policy is a default waiting to be found.

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