What triple net lease obligations does a new owner take on when buying a commercial building in Ontario?

In a triple net (NNN) lease, the tenant pays base rent plus its share of property tax, insurance, and common area maintenance costs, rather than the landlord absorbing those as part of a flat rent. When you buy a building with NNN tenants, you step into the landlord's side of that whole structure: you become responsible for actually paying the property taxes, arranging the building insurance, and maintaining the common areas, and then billing and collecting the tenants' proportionate shares of each.

The obligation that trips up new owners is the administrative side. NNN leases usually require an annual reconciliation, comparing what tenants were charged in estimated pass-throughs against actual costs for the year, with a true-up owing either way. If you buy mid-year, you inherit the landlord's side of that reconciliation process going forward, and the purchase agreement should address how costs and collections from the seller's period of ownership get apportioned between buyer and seller.

Before closing, review the actual lease wording on what's includable in common area maintenance, how costs are allocated among tenants, and whether the seller has been reconciling correctly, since inheriting a poorly run pass-through structure can mean absorbing costs you can't fully recover from tenants.