Property Management

In South Dakota, which of the following is TRUE about a 'gross lease' for commercial property?

AThe tenant pays for all operating expenses plus base rent
BThe tenant pays a fixed base rent and the landlord pays operating expenses (taxes, insurance, maintenance)✓ Correct
CThe tenant's rent is tied to gross sales revenues
DThe landlord pays the base rent and tenant pays operating expenses

Explanation

In a gross lease (full-service lease), the tenant pays a fixed base rent and the landlord is responsible for paying the property's operating expenses (property taxes, insurance, maintenance). This is in contrast to a net lease where the tenant pays some or all operating expenses.

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