Massachusetts Real Estate License Practice Test

In a net lease, what additional costs does the tenant typically cover?

1. Only rent

2. Taxes and insurance only

3. Rent and all operating expenses

4. Rent plus utilities

The correct answer is: Rent and all operating expenses

In a net lease, the tenant is responsible for paying not only the base rent but also various additional costs associated with the property, which typically include operating expenses. This structure can vary, but generally, the additional costs can encompass property taxes, property insurance, and routine maintenance expenses. This means that the correct choice reflects the nature of a net lease, where tenants take on a more significant financial responsibility beyond rent alone. By covering these operating expenses, tenants contribute to the overall costs of maintaining the property. It's important to note that while utilities may sometimes be included in this arrangement, they are not always a requisite part of a traditional net lease, depending on the specific terms outlined within the lease agreement itself. Thus, the choice indicating rent and all operating expenses is the most comprehensive and accurately describes the tenants' obligations under a typical net lease structure.