A gross lease—also referred to as a full service lease or gross rent or a gross rent lease—is a lease with a fixed monthly or annual rental fee that includes all rent and costs of operating the property, such as utilities, maintenance, taxes, and insurance. In this way, it is similar to a typical residential lease.
A variation of a gross rent lease is a “gross lease with stops”—meaning the tenant will contribute additional amounts if the landlord’s operating costs increase above a certain level. The level at which the tenant is required to contribute additional amounts to the landlord’s operating costs is known as the stop level, as that is where the landlord’s obligation to pay all of the costs (using the fixed rent payments) stops.
In Florida, a gross lease is a type of commercial lease agreement where the tenant pays a fixed amount that covers both the rent and all or most of the property's operating expenses, which can include utilities, maintenance, property taxes, and insurance. This arrangement simplifies budgeting for tenants since they can anticipate their monthly costs without worrying about variable expenses. However, it's important for tenants to carefully review the lease terms to understand what expenses are included and if there are any exceptions. The 'gross lease with stops' variation introduces a cap on the landlord's expenses, beyond which the tenant is responsible for additional costs. This cap is known as the 'stop level.' The specific terms of a gross lease, including the stop level and what expenses are covered, can vary widely and should be clearly defined in the lease agreement. Both parties should negotiate these terms to ensure clarity and to avoid future disputes. As with any legal agreement, it's advisable for tenants and landlords to consult with an attorney to review the terms of a gross lease and ensure that it aligns with their interests and complies with Florida's commercial leasing laws.