Which type of lease typically outlines who pays for utilities and property maintenance?

In a net lease, the tenant usually agrees to pay not just rent but also a portion of the property’s operating expenses, which often includes utilities and property maintenance costs. This lease structure is designed to benefit landlords by transferring some of the financial responsibilities associated with property management directly onto the tenant. As a result, the landlord can receive a net operating income that is less influenced by the costs of running the property.

This contrasts with other lease types. For example, in a gross lease, the landlord typically covers all utilities and maintenance costs, providing a simpler, more predictable payment system for the tenant. A combination lease may include features from both gross and net leases but doesn't specifically define who pays for utilities and maintenance in the same structured manner as a net lease. A joint lease, while it may involve shared agreements among multiple parties, does not specifically fit the established categories regarding utility and maintenance payments.

Ultimately, net leases are particularly important in commercial real estate, where the potential for variable expenses necessitates clarity on responsibilities between landlords and tenants.