Gross Lease

A gross lease, also known as a full service lease, is a type of lease agreement where the landlord pays for the property's operating expenses, including utilities, repairs, insurance, and property taxes. This is in contrast to a net lease, where the tenant is responsible for some or all of these costs.

In a gross lease, the tenant pays a higher, all-inclusive rent, and the landlord uses a portion of this rent to cover the property's operating expenses. Because these expenses are included in the rent, the tenant does not have to worry about variable costs, making budgeting easier.

This type of lease is common in multi-tenant office buildings and apartment complexes. In these cases, the landlord is often better equipped to manage the property's expenses, and it would be impractical to divide these costs among multiple tenants.

However, gross leases can also include "escalation clauses," which allow the landlord to pass on increased operating costs to tenants. For example, if property taxes or utility costs increase, the landlord might be able to increase the rent to cover these costs.

As always, both landlords and tenants should carefully review and understand the terms of any lease agreement before signing.