Massachusetts Real Estate License Practice Test

Which lease type is most common in residential properties?

1. Graduated Lease

2. Net Lease

3. Gross Lease

4. Sublease

The correct answer is: Gross Lease

The most common lease type in residential properties is the gross lease. In a gross lease agreement, the landlord typically covers all operating expenses, including property taxes, insurance, and maintenance costs, allowing tenants to pay a single, consolidated rent amount. This structure is appealing to residential tenants because it simplifies financial planning; they know exactly how much rent they need to pay each month without worrying about additional expenses. In contrast, graduated leases involve periodic increases in rent, net leases require tenants to pay some or all of the property expenses separately from rent, and subleases represent an arrangement where the original tenant rents out their space to another party, which is less common in standard residential situations. The gross lease's straightforwardness makes it the preferred choice among tenants who value predictability in their housing costs.