Property Management
A Mississippi commercial property manager signs a new tenant to a 5-year gross lease. Under a gross lease, which party typically pays operating expenses?
AThe tenant pays all operating expenses
BThe landlord pays most or all operating expenses; the tenant pays a fixed rent✓ Correct
COperating expenses are split 50/50 between landlord and tenant
DThe tenant pays utilities only; landlord pays all other expenses
Explanation
In a gross (or full-service) lease, the tenant pays a flat rent and the landlord pays most or all operating expenses (taxes, insurance, maintenance, utilities). This contrasts with a net lease where the tenant pays base rent plus some or all operating expenses.
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