Which statement best describes a gross lease?

Which statement best describes a gross lease?

• A. Tenant pays all expenses
• B. Landlord pays most expenses; tenant pays base rent
• C. Tenant pays none; landlord covers everything
• D. Expenses are split equally

Answer: (B)

In a gross lease, the rent is a single amount paid by the tenant, and the landlord covers most of the property’s operating expenses such as property taxes, insurance, and maintenance. The tenant’s obligation is the base rent, with those costs folded into the rent rather than billed separately. That description matches the statement that the landlord pays the expenses while the tenant pays base rent. If the tenant were paying all expenses, that would be a net lease, not gross. If the tenant paid none at all or expenses were divided, those describe other arrangements, not a standard gross lease.

In a gross lease, the rent is a single amount paid by the tenant, and the landlord covers most of the property’s operating expenses such as property taxes, insurance, and maintenance. The tenant’s obligation is the base rent, with those costs folded into the rent rather than billed separately. That description matches the statement that the landlord pays the expenses while the tenant pays base rent.

If the tenant were paying all expenses, that would be a net lease, not gross. If the tenant paid none at all or expenses were divided, those describe other arrangements, not a standard gross lease.