Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is typically excluded in a gross lease arrangement?

1. Utilities paid by the tenant

2. Base rent paid by the tenant

3. Maintenance costs covered by the landlord

4. Property taxes included in the rent

The correct answer is: Maintenance costs covered by the landlord

In a gross lease arrangement, the landlord typically assumes responsibility for most of the property-related expenses, which include maintenance costs. This means that tenants pay a set amount of rent, and the landlord covers utilities, maintenance, property taxes, and insurance from that rent. The rationale behind this structure is to simplify the financial responsibilities of the tenant while giving them the predictability of fixed costs. Tenants in a gross lease usually do not need to worry about variable expenses associated with operating the property, making it a convenient option for many. In contrast, options like utilities, base rent, and property taxes are generally covered or included in the rent paid by the tenant in a gross lease. Therefore, maintenance costs, which are typically the landlord's responsibility, fit seamlessly into the definition of what is excluded from the tenant's burden in this arrangement.