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 Ohio, 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 include property taxes, insurance, utilities, maintenance and repairs, and common area maintenance (CAM) costs. The exact expenses and the method for calculating the tenant's share are typically negotiated and outlined in the lease agreement. The terms of a modified gross lease can vary significantly from one lease to another, and it is important for both landlords and tenants to clearly understand and agree upon which expenses are the tenant's responsibility. Ohio state statutes and federal law do not prescribe a specific format for modified gross leases, so the terms are largely dictated by the lease contract itself. Tenants and landlords should consider consulting with an attorney to ensure that the lease terms are fair, clear, and legally compliant.