Final answer:
A modified gross lease is a type of lease agreement where the base rent includes most of the operating expenses, such as taxes, insurance, and maintenance, but does not include utilities or cleaning services. It is commonly used in the real estate industry.
Step-by-step explanation:
A modified gross lease is a type of lease agreement commonly used in the real estate industry. In this type of lease, the landlord includes most of the operating expenses, such as taxes, insurance, and maintenance, in the base rent. However, utilities and cleaning services are not typically included in the base rent and are the responsibility of the tenant.
For example, let's say you are renting a commercial space for your business. With a modified gross lease, you would pay a set monthly rent that already includes costs like property taxes, insurance, and common area maintenance. However, you would still need to pay separately for utilities like electricity and water, as well as cleaning services for your leased space.