Property Management
In New Mexico, which of the following best describes a 'gross lease' with a 'stop clause'?
AA lease where the tenant pays all expenses above a certain amount
BA gross lease where the landlord pays expenses up to a set level (the stop) and the tenant pays any expenses above that level✓ Correct
CA lease that expires automatically when a trigger event occurs
DA lease that prohibits tenant improvements
Explanation
A stop clause (or expense stop) in a gross lease sets a cap on the landlord's expense contributions. If operating expenses exceed the stop amount, the tenant pays the overage—giving landlords protection against expense escalation.
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