Property Management

Gross Lease

A lease in which the landlord pays all property expenses (taxes, insurance, maintenance) and the tenant pays a flat rental amount.


Definition

In a gross lease (also called a full-service lease), the tenant pays a fixed monthly rent and the landlord is responsible for all property operating expenses including property taxes, insurance, maintenance, and utilities. This is the standard residential lease structure. The landlord's risk is higher because expenses may increase while rent remains fixed during the lease term. Some gross leases include an expense stop, a cap above which the tenant must share in increased costs.

Exam Tip

Gross lease = tenant pays one flat amount, landlord covers expenses. Net lease = tenant pays rent PLUS some or all expenses. Triple net (NNN) = tenant pays everything.

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