Gross Lease Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Gross Lease, written in plain English, along with examples of how it is used.

What is Gross Lease?

A lease that the landlord pays operating expenses with the tenant paying a flat monthly rent.

History and Meaning of Gross Lease

In a commercial real estate lease, a gross lease is a type of lease agreement where the tenant pays a fixed amount of rent to the landlord, and the landlord assumes all the operating expenses associated with the property. This means that the tenant pays a lump sum, and the landlord is responsible for covering all costs associated with the property, such as maintenance, utilities, property taxes, and insurance.

Gross leases are commonly used in commercial real estate agreements. They are also sometimes referred to as a full-service lease or a full gross lease.

Examples of Gross Lease

  1. A tenant signs a gross lease agreement with a landlord for a commercial property. The tenant agrees to pay a fixed rent of $10,000 per month, and the landlord agrees to cover all operating expenses, such as utilities, property taxes, and insurance.

  2. A business owner rents office space in a building through a gross lease agreement. The lease specifies that the tenant will pay a fixed rent each month, and the landlord will cover the cost of all maintenance and repairs to the building.

  3. A restaurant owner rents a space in a strip mall through a gross lease agreement. The tenant pays a fixed rent each month, and the landlord covers all expenses associated with the property, such as property taxes, insurance, and maintenance of the common areas.

Legal Terms Similar to Gross Lease

  1. Net lease - A type of commercial lease agreement where the tenant is responsible for paying both the rent and a portion of the operating expenses.
  2. Triple net lease - A type of commercial lease agreement where the tenant is responsible for paying rent, as well as property taxes, insurance, and maintenance costs.
  3. Modified gross lease - A type of commercial lease agreement where the tenant pays a fixed rent each month, and the landlord is responsible for some, but not all, of the operating expenses associated with the property.