What is a modified gross lease?

A modified gross lease is a type of lease agreement that falls between a gross lease and a net lease. In a modified gross lease, the tenant pays a base rent amount to the landlord, which includes certain operating expenses such as property taxes, insurance, and maintenance costs. However, the tenant may also be responsible for paying for some additional expenses such as utilities, janitorial services, or repairs.

The specific terms of a modified gross lease can vary depending on the agreement between the landlord and tenant. Typically, the landlord retains responsibility for major structural repairs and expenses, while the tenant is responsible for day-to-day operational costs.

Overall, a modified gross lease offers a middle ground between the simplicity of a gross lease (where the tenant pays a flat fee and the landlord covers all expenses) and the flexibility of a net lease (where the tenant pays a base rent and additional expenses separately). This type of lease can be beneficial for both landlords and tenants, as it allows for a more customized arrangement that can be tailored to the specific needs of both parties.