National Real Estate Exam (PSI)ContractsMedium
A tenant signs a commercial lease requiring a flat monthly rent that covers the base rent as well as property taxes, insurance, and maintenance, all paid by the landlord. What type of lease is this?
- AGround lease
- BNet lease
- CGross lease
- DPercentage lease
Show answer & explanationAnswer & explanation
Correct answer: C. Gross lease
A gross lease requires the tenant to pay a single flat rent, while the landlord is responsible for property expenses such as taxes, insurance, and maintenance.
Why the other options are wrong
- A. A ground lease involves leasing only the land, typically for tenant-built improvements.
- B. A net lease requires the tenant, not the landlord, to pay some or all property expenses.
- D. A percentage lease bases rent partly on a tenant's sales, which isn't described here.
Gross Lease
A lease in which the tenant pays a fixed rent and the landlord is responsible for property expenses like taxes, insurance, and maintenance.
- Common in residential and some office leases
- Opposite of a net lease
- Tenant's payment is simple and predictable
Memory trick: Gross means landlord grabs all the bills.