![]() Which fees the tenant must pay depends on the net lease. In this agreement, the base rent tenants pays is lower, but they must also pay maintenance fees of all kinds. The net lease, however, tends to favor the landlord. Gross lease rates typically rise when the expenses for maintenance and utilities rise. A gross lease essentially makes it as easy as possible for the tenant to make payments so she or he can focus on operating and growing the business. Because more is required of the landlord, the amount the tenant pays is usually higher to compensate. Occasionally, the tenant will be required to pay electricity, water, or gas him or herself. The landlord is responsible for paying insurance, utilities, janitorial services, and maintenance. The most notable characteristic of this kind of agreement is that the tenant pays one large sum. The gross lease tends to favor the tenant. ![]() The three most common types of leases are gross leases, net leases, and modified gross leases. Regardless of what agreement you have, it is important for you to carefully read the lease details so you know what is expected in any situation. There are three different main real estate leases that can be entered into, each with distinct advantages and disadvantages. When a tenant and landlord enter an agreement for a commercial property, a decision for the lease needs to be established.
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