Illinois Real Estate Practice Exam

The correct answer is a gross lease. In a gross lease arrangement, the tenant pays a fixed rent amount that covers all operating expenses, including property taxes, insurance, and maintenance. This means that the landlord is responsible for handling these costs and managing the property, which simplifies budgeting for the tenant since they only need to worry about a single monthly payment.

In contrast, a net lease typically requires the tenant to pay not only the base rent but also some or all of the additional property expenses, which can vary significantly. A triple net lease is a specific type of net lease where the tenant assumes responsibility for all expenses, including taxes, insurance, and maintenance, which can lead to fluctuating monthly costs. A sublease involves leasing property that a tenant has rented to another party and does not inherently dictate how payments or expenses are handled.

Understanding the distinctions between these types of leases is essential for both tenants and landlords when negotiating rental agreements.