Certified Residential Appraiser Practice Exam

In a gross lease, who pays for all expenses of the property?

1. The Tenant

2. The Landlord

3. Both Tenant and Landlord

4. Third-party Management

The correct answer is: The Landlord

In a gross lease, the landlord is responsible for covering all the expenses associated with the property. This includes property taxes, insurance, maintenance, and repairs. The tenant pays a single lump sum rent, which typically does not vary with the property’s operating expenses. This arrangement is advantageous for tenants as it simplifies their budgeting process, since they know exactly how much rent they need to pay each month without worrying about fluctuating additional costs. In this relationship, the landlord takes on the financial burden of managing property expenses, ensuring that the tenant can focus on their business operations without added stress from variable costs.