Under California law, what is a 'gross lease' as commonly used in California commercial transactions?
Correct Answer
C) A lease where the landlord pays all property operating expenses and the tenant pays a single fixed rent amount
Under California commercial real estate law, a gross lease (also called a full-service lease) is one in which the tenant pays a fixed rent amount, and the landlord is responsible for paying all property operating expenses such as property taxes, insurance, maintenance, and utilities. This simplifies the tenant's obligations to a single predictable payment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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