when a gross lease excludes insurance and utilities the tenant is required to absorb those costs 
types of gross leasesgross leases fall into two different categories the first is called a modified gross lease while the other is called a fully service lease a modified gross lease contains the principal provisions associated with a gross lease but it can be adjusted to suit the needs of the property owner and the tenant it is essentially a combination of a gross lease and a net lease where the tenant pays base rent at the lease s inception 5this kind of gross lease takes on a proportional share of some of the other costs associated with the property as well such as property taxes utilities insurance and maintenance 3 for instance these modifications may state that the tenant is responsible for the costs associated with the electric utility but that the property owner is responsible for waste pickup modified gross leases are commonly used with commercial spaces where there is more than one tenant such as office buildings this type of lease typically falls between a gross lease where the landlord pays for operating expenses and a net lease which passes on property expenses to the tenant 5a fully service lease is one of the easiest gross lease options available it requires the tenant to cover just the rent while the landlord assumes responsibility for every other cost as such the property owner calculates the cost of other expenses such as utilities property taxes and maintenance into the rental amount 5this type of gross lease allows the tenant to rent without having to budget for additional costs including property maintenance but because the landlord covers the extra costs fully service leases can often be more expensive 6be sure you read the fine print of any lease you sign advantages and disadvantages of a gross leaseas with any other type of contract there are benefits and drawbacks to signing a gross lease for both the landlord and the tenant we ve listed some of the most common pros and cons below property owners can benefit in several ways by choosing a gross lease to rent out their properties despite these benefits the drawbacks to landlords include a gross lease help tenants in the following ways some of the primary cons include landlords can roll additional costs into the rentlandlords can pass on inflationary costs to the tenanttenants aren t responsible for any costs other than the renttenants can focus their time on their business rather than the rental spacelandlords are responsible for any additional costslandlords must spend more time on administrative duties associated with paying the operating expensestenants may have to pay a higher amount in rent than if they were also responsible for paying the billstenants may have to deal with landlords who don t keep up to date with maintenancegross leases vs net leasesa net lease is the opposite of a gross lease under a net lease the tenant is responsible for some or all costs associated with the property such as utilities maintenance insurance and other expenses there are three types of net leases net leases may allow tenants more control over some costs and aspects of the property but they come with an increased degree of responsibility for instance if maintenance is a cost borne by the tenant they may have the ability to make cosmetic changes however they also absorb most repair costs 8landlords often restrict or prohibit cosmetic changes to the property even when maintenance is a tenant expense tenants are also subject to variable utility costs to regulate the expenses they may employ different strategies to reduce consumption gross lease faqsa lease is a contract between a property owner and a lessee where the landlord agrees to give the tenant full access to the property rent on the other hand is the fee charged by a property owner for the exclusive use of their property by a tenant the main types of commercial leases are gross leases and net leases these two categories are further broken down into modified gross leases fully service gross leases single net leases double net leases and triple net leases the most common and simplest type of lease is the gross lease it is a contract between a landlord and tenant wherein the lessee in exchange for the exclusive use of a piece of property agrees to pay the lessor a fixed sum of money for a certain period of time that encompasses rent and all costs associated with ownership such as taxes insurance and utilities 