What type of lease requires the tenant to pay fixed rent along with insurance and other expenses?

Study for the CAS 45-Hour Real Estate Principles Course Test. Utilize flashcards and multiple choice questions to prepare thoroughly. Each question is paired with hints and explanations. Get ready to excel in your exam!

A net lease is characterized by the tenant being responsible not only for paying a fixed rent but also for covering additional expenses associated with the property, such as insurance, property taxes, and maintenance costs. This structure benefits landlords, as it shifts many of the financial responsibilities and risks onto the tenant, ensuring a more stable income and potentially less management involvement for the property owner.

In contrast, a gross lease would typically mean that the landlord is responsible for all additional expenses related to the property, which is not aligned with the question. Similarly, a percentage lease is generally used in commercial contexts, where rent is based on a percentage of the tenant's sales, rather than fixed rent combined with additional expenses. A month-to-month lease refers to a rental agreement that can be terminated at any time, typically without a long-term commitment from either the tenant or landlord, and does not inherently include the additional expenses outlined in the question. Thus, a net lease is the correct choice that encompasses the arrangement described.

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