Check Your Understanding Answers
- Define a gross lease.
In a gross lease the tenant pays a fixed rent and the owner pays the taxes, insurance, and other normal ownership expenses.
- With what type of lease does the tenant agree to pay all the taxes, insurance, maintenance, and repairs?
Net-net-net lease (Triple net lease)
- Describe how rent is calculated on a percentage lease.
In a percentage lease, the rent is based a percentage of the monthly or annual gross sales made on the site. There is usually a minimum rent required in addition to the percentage of the gross.
- How do residential leases differ from commercial and other types of leases?
Residential lease terms are shorter, the clauses are fairly standard from one property to the next, and the clauses are generally not negotiable.
