The CE Shop National Practice Exam 2025 – Complete Test Prep

In a gross lease, one of its defining characteristics is that the landlord is responsible for paying all operating expenses associated with the property. This includes costs such as property taxes, insurance, and maintenance. The tenant typically pays a fixed amount in rent, and the landlord absorbs the additional costs. This arrangement is favorable for tenants as it simplifies budgeting since their financial obligation is predictable and does not fluctuate with varying operating expenses.

In contrast, the other options describe different lease structures or arrangements. For instance, in a net lease, the tenant pays base rent plus certain expenses, which is contrary to the principle of a gross lease. A percentage lease involves rent being based on a percentage of revenue, which is a different method of leasing typically used for retail spaces. Lastly, requiring the tenant to maintain the property is more characteristic of a lease type like a modified gross or net lease, where the tenant assumes more responsibilities compared to a gross lease arrangement.