A modified gross lease is a commercial lease in which the tenant pays a fixed base rent on a monthly or annual basis, but also agrees to pay a proportional amount of the operating expenses for the property, such as:

• taxes

• property insurance

• utilities

• maintenance and repairs (including structures such as the roof), systems (heating, ventilation, and air conditioning and electrical)

• common area maintenance (CAM) such as maintenance of the parking lot, landscaping, maintenance staff, security staff, and maintenance of elevators and escalators.

There are many variations of modified gross leases, with different expenses reimbursed by the tenant to the landlord, and different methods of calculating the tenant’s proportionate share of the expenses.

In Georgia, a modified gross lease is a type of commercial lease agreement where the tenant pays a set base rent plus a share of certain operating expenses for the property. The specific expenses covered by the tenant can vary from lease to lease but typically include property taxes, insurance, utilities, maintenance and repairs, and common area maintenance (CAM) costs. The tenant's proportionate share of these expenses is usually determined based on the square footage they occupy relative to the total property or another agreed-upon method. It's important for both landlords and tenants to clearly define and agree upon which expenses are included and the calculation method in the lease agreement to avoid disputes. The terms of a modified gross lease in Georgia are subject to negotiation between the landlord and tenant and should be outlined in the lease contract. As with any legal agreement, it is advisable for both parties to consult with an attorney to ensure that their rights and obligations are adequately protected and that the lease complies with applicable state statutes and federal law.