Practice Of Real Estate And Real Estate Calculations Practice Test

In a net lease, who typically pays some or all operating expenses?

In a net lease, landlord pays all expenses In a net lease, tenant pays some or all operating expenses In a net lease, expenses are not allocated In a net lease, tenant pays only rent

Correct Answer:

In a net lease, tenant pays some or all operating expenses

Explanation:

In a net lease, the tenant takes on the responsibility for some or all operating expenses in addition to paying rent. This arrangement shifts costs like property taxes, building insurance, maintenance, and sometimes common area maintenance to the tenant, with the exact responsibilities depending on whether it’s a single-net, double-net, or triple-net lease. That’s why the correct idea is that the tenant pays some or all operating expenses. A landlord paying all expenses would describe a gross lease, and saying expenses aren’t allocated or the tenant pays only rent doesn’t fit the net-lease structure where those pass-through costs exist.

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