In a net lease, who typically pays the property expenses?

In a net lease, the correct understanding is that the tenant pays some or all expenses related to the property separately from the base rent. This includes costs such as property taxes, insurance, and maintenance expenses. The structure of a net lease is designed so that the landlord receives a lower base rent while the tenant covers these additional expenses.

This arrangement benefits landlords by providing predictable income and minimizing their responsibilities for property upkeep and expenses, while tenants can negotiate terms that allow them to have control over variable costs that affect their lease. Given the variations in lease structures, such as gross leases or modified gross leases where costs might be handled differently, the net lease specifically emphasizes the tenant's responsibility for these expenses.

The incorrect options imply that the landlord bears the full cost or that the expenses are equally split, neither of which accurately reflects the arrangement typical of a net lease.