In a gross lease, who typically pays most of the operating expenses?

• A. Landlord
• B. Tenant
• C. Both equally
• D. Neither pays expenses

Answer: (A)

In a gross lease, the landlord pays most operating expenses, and the rent is set to cover those costs. That means items like property taxes, insurance, maintenance, and utilities are included in the rent, and the tenant’s obligation is simply the fixed rent amount. This structure contrasts with net or modified gross leases, where the tenant takes on some or all of those costs. So the landlord is the party who typically pays the operating expenses in a gross lease.