What type of lease would John have if he pays $100 per month for a garage with fixed expenses?

What type of lease would John have if he pays $100 per month for a garage with fixed expenses?

• A. Variable lease
• B. Gross lease
• C. Net lease
• D. Ground lease

Answer: (B)

In this scenario, John's lease type is identified as a gross lease. A gross lease is characterized by a fixed rental payment that includes all operating expenses, such as maintenance, utilities, taxes, and insurance, within the monthly rent. This means that John pays a consistent amount of $100 per month without worrying about additional costs each month, which is typical under a gross lease agreement. In contrast, a variable lease would involve payments that change over time based on factors like market rates or expenses, leading to uncertainty in monthly payments. A net lease typically means that the tenant pays a lower base rent but is responsible for some or all additional operating costs, such as taxes or maintenance, separately. A ground lease is more related to long-term leases of land rather than a garage, often for purposes like development or construction. Thus, given John's situation, where a steady monthly fee covers all expenses, the correct classification of his lease is a gross lease.

In this scenario, John's lease type is identified as a gross lease. A gross lease is characterized by a fixed rental payment that includes all operating expenses, such as maintenance, utilities, taxes, and insurance, within the monthly rent. This means that John pays a consistent amount of $100 per month without worrying about additional costs each month, which is typical under a gross lease agreement.

In contrast, a variable lease would involve payments that change over time based on factors like market rates or expenses, leading to uncertainty in monthly payments. A net lease typically means that the tenant pays a lower base rent but is responsible for some or all additional operating costs, such as taxes or maintenance, separately. A ground lease is more related to long-term leases of land rather than a garage, often for purposes like development or construction.

Thus, given John's situation, where a steady monthly fee covers all expenses, the correct classification of his lease is a gross lease.