Property Management
What is a 'gross lease' versus a 'modified gross lease' in Pennsylvania commercial property management?
AGross leases require tenants to pay all expenses; modified gross leases require landlords to pay some
BIn a full gross lease, the landlord pays all operating expenses; in a modified gross lease, some expenses (often utilities or janitorial) are passed to the tenant✓ Correct
CGross leases are for short-term tenants; modified gross leases for long-term
DModified gross leases are required in Pennsylvania for buildings over 10,000 square feet
Explanation
A full gross (full service gross) lease includes all operating expenses in the base rent — taxes, insurance, utilities, maintenance, and janitorial services. A modified gross lease includes some expenses in the base rent but passes others (typically utilities or janitorial) to the tenant.
People Also Study
Related Pennsylvania Questions
- A commercial lease in Pennsylvania that requires the tenant to pay a base rent plus a share of operating expenses is called a:Property Management
- A Pennsylvania commercial tenant with a 'percentage lease' pays rent based on:Property Management
- An Allentown duplex has annual gross rent of $28,800, operating expenses of $9,500, and a mortgage payment of $12,000/year. What is the cash flow before taxes?Real Estate Math
- A 'gross lease' used for some Pennsylvania office buildings means the tenant pays:Property Valuation
- A 3-unit Pennsylvania property generates $3,600/month total rent (all units). Operating expenses are 35% of gross income. What is the monthly NOI?Real Estate Math
- A Pennsylvania commercial property's annual gross rent is $200,000. Vacancies run 8% and operating expenses are $75,000. What is the NOI?Real Estate Math
- A Pennsylvania commercial tenant occupies 3,500 square feet at $24 per sq ft per year on a gross lease. What is the monthly rent?Real Estate Math
- A Pennsylvania commercial property manager negotiating a lease renewal should be aware that rent escalation clauses typically provide for:Property Management
Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
Study This Topic
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →