What type of lease requires the tenant to cover some or all property expenses?

A net lease is characterized by the tenant assuming responsibility for certain property expenses that go beyond the base rent. This can include costs like property taxes, insurance, and maintenance fees. In this type of lease, the landlord typically receives a lower base rent, while the tenant covers various operating expenses. This arrangement can be beneficial for landlords as it helps to ensure that they are not directly responsible for fluctuating property costs.

In contrast, a gross lease generally includes utilities and other expenses in the rental price, so the tenant does not bear those costs. A modified gross lease represents a middle ground, where certain expenses may be split between the landlord and tenant, but not all property costs are passed onto the tenant. A percentage lease is primarily used in retail situations where the tenant pays a base rent plus a percentage of sales, which might not necessarily include operational expenses.

Thus, a net lease distinctly sets itself apart by placing greater financial responsibility on the tenant for a variety of property-related expenses.