The CE Shop National Practice Exam

Brittany has a gross lease because her monthly lease payment encompasses several costs, including maintenance, utilities, and insurance. In a gross lease arrangement, the landlord covers most or all of the property's expenses, meaning the tenant pays a single, fixed rent amount without worrying about additional costs. This structure simplifies budgeting for the tenant, as they do not have to account for variable expenses that may fluctuate, such as maintenance or utility costs.

In contrast, a net lease would typically have the tenant cover some of these costs separately, such as insurance or maintenance, while a percentage lease would involve the tenant paying a base rent plus a percentage of their sales revenue—common in retail spaces. A modified gross lease falls somewhere between a gross and net lease, where the tenant may pay some additional expenses, but typically not all. The key characteristic of Brittany's situation is that her rent covers all related costs, clearly classifying it as a gross lease.