What type of lease requires the tenant to pay a fixed monthly charge while the landlord covers all operating expenses?

The type of lease that requires the tenant to pay a fixed monthly charge while the landlord covers all operating expenses is known as a gross lease. In this arrangement, the tenant is responsible for paying rent only, which is typically a predictable and fixed amount, while the landlord assumes the responsibility for all other expenses associated with the property. These can include property taxes, insurance, and maintenance costs. This structure provides the tenant with simplicity in budgeting because they do not have to account for variable costs that may arise from operating the property.

In contrast, other types of leases assign varying responsibilities related to expenses. For instance, a net lease places the burden of some or all operating expenses on the tenant in addition to the base rental amount. A ground lease involves leasing land where the tenant typically builds on it and pays rent for the land itself, and a variable lease would involve fluctuating payments, making budgeting less predictable. Therefore, the gross lease approach is particularly beneficial for tenants seeking clarity and stability in their financial commitments toward rental properties.