Leases
Gross lease
A lease in which the landlord pays the operating expenses out of the rent
The tenant pays one figure and the landlord absorbs taxes, insurance and maintenance from it. Residential leases are almost always gross, which is why the arrangement feels invisible until a commercial lease offers the alternative.
Easily confused with
A net lease moves some or all of those expenses onto the tenant, and the rent quoted is lower to match. Comparing the two by quoted rent alone is the mistake the item is testing.
How the exam asks about it
Identify it by what the tenant does not pay. A single rent covering everything is a gross lease, whatever else the item describes.
Quick check: Gross lease
One question. Pick an answer to see the explanation.
Which term is being defined: “A lease in which the landlord pays the operating expenses out of the rent”?
Related terms
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