What type of lease requires the tenant to pay a base rent along with all or part of the operating expenses?

A net lease is a type of lease in which the tenant is responsible for paying not only the base rent but also certain operating expenses associated with the property. These expenses can include property taxes, insurance, maintenance, and utilities. In contrast to a gross lease, where the landlord covers most or all operating expenses, a net lease allows landlords to shift some of the financial responsibilities for property upkeep onto the tenant, which can lead to lower base rents.

This arrangement is particularly common in commercial leasing, where tenants may have a direct interest in the property’s upkeep and management, and it aligns their financial incentives with the performance of the property. Understanding the nuances of lease types is crucial for both landlords and tenants, as it impacts their respective financial obligations and responsibilities within the leasing agreement.