What is a lease called in which the tenant pays a flat fee while the landlord covers all building expenses?

A lease in which the tenant pays a flat fee while the landlord covers all building expenses is known as a gross lease. In this arrangement, the rental amount typically includes all operating costs such as property taxes, insurance, and maintenance expenses. This can be appealing to tenants as it provides predictability in budgeting, allowing them to focus on their business activities without worrying about fluctuating costs associated with the property.

In contrast, other types of leases involve different arrangements regarding costs. For instance, a net lease often requires the tenant to pay a base rent plus additional costs like utilities and property taxes, while a percentage lease ties rental payments to the tenant's revenue, where they pay a percentage of their sales along with a base rent. A month-to-month lease provides flexibility but does not specify the cost-sharing structure regarding building expenses. Therefore, the characteristics of a gross lease make it distinct and clarify why it is the correct answer in this context.