Which statement best defines a gross lease?

A gross lease is defined by the arrangement where the landlord is responsible for covering all operating expenses associated with the leased space. This means that while the tenant typically pays a fixed amount of rent, they are not responsible for paying additional costs like property taxes, insurance, or maintenance fees; these are all handled by the landlord. This type of lease structure simplifies budgeting for tenants, as they know exactly how much they will have to pay each month without worrying about extra costs that can arise from variable operating expenses.

Understanding this concept is crucial because it affects both the financial obligations of the tenant and the investment strategy of the landlord. In a gross lease, tenants often prefer this arrangement as it minimizes unexpected expenses, while landlords may choose this type of lease to attract tenants who value predictable financial commitments. Other options may provide confusion regarding responsibility allocation or lease structure that doesn't accurately describe the nature of a gross lease.