What characterizes a gross lease?

A gross lease is characterized by the owner (landlord) paying for all operating expenses associated with the property while the tenant pays a fixed rent amount. This means that the tenant's obligation is primarily to pay rent, without the additional burden of paying for utilities, property taxes, insurance, maintenance, and other operational costs.

This arrangement simplifies budgeting for tenants, as they know exactly what their rent will be each month and do not have to worry about fluctuating costs related to property management. The predictability in a gross lease can be appealing to tenants, especially businesses seeking stable expenses.

Other options do not match the structure of a gross lease. For instance, when the tenant pays for all expenses directly, it describes a net lease or similar arrangement. Variance in rent based on property value is not characteristic of a gross lease, and a percentage rent model typically refers to retail leases where landlords receive a portion of sales revenue. Therefore, the defining feature of a gross lease is fundamentally the landlord's responsibility for all property-related expenses while the tenant pays a consistent rent.