Question

Julio signed a lease in which he will pay a fixed amount of rent each month and the landlord will pay all of the building's expenses. Which type of lease has Julio signed?

a) Net lease
b) Gross lease
c) Percentage lease
d) Ground lease

Answer 1

Julio has signed a gross lease, where he pays a fixed rent amount and the landlord bears the building expenses. This type of lease is distinct from net, percentage, and ground leases, which have different terms of expenses and payments.

Step-by-step explanation:

Julio has signed a gross lease, which is an arrangement where he agrees to pay a fixed amount of rent, and the landlord covers all of the building's expenses, including taxes, insurance, and maintenance. This is opposed to a net lease, where the tenant would also be responsible for some or all of these costs on top of their rent. A percentage lease involves the tenant paying a base rent plus a percentage of their business's revenue, and a ground lease involves leasing the land only, typically to develop a building on it.