In the context of leasing, what is a gross lease most commonly used for?

A gross lease is most commonly associated with residential properties, particularly apartments. In this type of lease agreement, the landlord typically covers all operating expenses related to the property, including utilities, property taxes, and maintenance costs. This structure simplifies budgeting for tenants since they pay a single, all-inclusive rent amount, which enhances the appeal of the lease for many residents who prefer predictable and transparent housing costs.

In contrast, commercial properties often involve varied lease types, like net leases, where tenants might bear additional costs, making a gross lease less prevalent in that market. Similarly, while land leases may resemble a gross lease in some respects, the primary context where gross leases are utilized is in residential situations where smooth cost management is a priority for tenants. Industrial spaces can also have unique leasing agreements that usually diverge from the gross lease arrangement, emphasizing variable expenses tied to business operations rather than covered costs.