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What Is a Gross Lease?

A tenant is not obligated to make repairs to the structure of a building under a gross lease agreement.
With a gross lease, the tenant pays only a specific monthly or annual rental amount.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Images By: Pds209, Andiafaith
  • Last Modified Date: 27 August 2014
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A gross lease is a lease or rental agreement in which the tenant pays a specific monthly or annual rental amount, and does not have any obligation for paying any additional charges or fees relevant to the upkeep and operation of the facility. Depending on the type of property involved, this means that the tenant is not responsible for making repairs to the structure of the building, landscaping costs, utilities, insurance, or property taxes. Liability for all those assorted charges remains with the owner of the property.

In many nations, the gross lease is one of the most common types of apartment rental agreements. In exchange for the monthly rental amount, the tenant has the use of the apartment, any appliances that are included with the unit, and basic utilities such as water and sewage, natural gas, and electricity. Depending on the terms of the property lease, the landlord may also provide other utilities as part of the amenities, including local telephone service and cable television.

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A gross lease is also likely to cover various general maintenance charges, such as the costs for mowing the lawn, and engaging in other landscaping tasks. The landlord’s duties are also likely to include providing the tenants with ongoing pest control, usually by establishing a contract with a local extermination service. As with other amenities included under the terms of the lease, the tenant is not charged for the lawn and garden upkeep, or the periodic treatments for pests that are administered by the extermination service.

With a gross lease, the tenant is not responsible for making repairs to the structure. The landlord remains responsible for replacing appliances that cease to function, repairing broken windows, or dealing with plumbing and wiring issues. The tenant’s responsibility is to report the issue to the landlord in a timely manner, making it possible for the owner to evaluate the situation and take steps to resolve the matter as quickly as possible.

The maintenance of property insurance and the payment or property taxes also remain with the landlord as part of the terms of a gross lease. It is important to note that in most jurisdictions, the landlord is only required to maintain insurance that covers the buildings, grounds, wiring, plumbing, and the major appliances that are considered part of the property. While some landlords do choose to include some amount of coverage that protects their tenants from loss of property due to some type of disaster situation, that coverage is usually limited. For that reason, tenants should take steps to secure their own renter’s insurance coverage, even if when the rental agreement is structured as a gross lease.

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