Gross Lease
A gross lease is a rental agreement where the tenant pays a fixed rent amount and the landlord is responsible for paying all or most property expenses including taxes, insurance, utilities, and maintenance. This arrangement provides tenants with predictable occupancy costs since most building expenses are included in the base rent.
Example
“The office tenant preferred a gross lease arrangement because it meant paying one fixed amount without worrying about utility bills or maintenance costs.”
Memory Tip
In a gross lease, the landlord gets the 'gross' responsibility - they handle all the messy details and expenses.
Why It Matters
Gross leases simplify budgeting for tenants and reduce their risk of unexpected cost increases, while landlords benefit from maintaining control over property management and operations.
Common Misconception
Many people think gross leases always include every possible expense, but some gross leases exclude certain costs like utilities or require tenants to pay increases above a base year.
In Practice
A small business signs a gross lease for office space at $25 per square foot annually, knowing their only additional costs will be their business phone and internet service since the landlord covers utilities, janitorial, taxes, and building maintenance.
Etymology
Combines 'gross' from Old French 'gros' (meaning complete/total) with 'lease' from Old French 'laisser' (to let go), creating a lease where the landlord takes on the total responsibility for expenses.
Common Misspellings
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