Modified Gross Lease

Glossary

Sometimes referred to as a base year model gross lease, a type of real estate lease agreement where:

Some operating costs are included in the base rent, like a typical gross lease.
The landlord pays for most of the property operating expenses, such as real estate taxes, maintenance, and insurance.
The tenant pays:
- its proportionate share of increases in expenses, such as real estate taxes and operating expenses, over a base year. These provisions are known as escalation clauses; and
- additional costs related to the leased premises, such as certain maintenance costs.

Modified Gross Lease | Practical Law