Property Management

Gross leases differ from net leases in that under a gross lease:

AThe tenant pays all operating expenses in addition to base rent
BThe landlord pays most or all operating expenses and the tenant pays a fixed rent✓ Correct
CThe rent adjusts monthly with the consumer price index
DThe tenant owns improvements made to the property

Explanation

Under a gross lease, the tenant pays a fixed rent and the landlord covers operating expenses (taxes, insurance, maintenance). Under net leases, the tenant pays some or all operating costs.

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