In a situation where a lease is marked as a net lease, which costs is the tenant most likely required to pay?

In a net lease, the tenant typically assumes certain costs associated with the property in addition to the base rent. Among these costs, property taxes are commonly included. In a net lease arrangement, the landlord generally charges the tenant for specific operating expenses related to the property, which can include property taxes, insurance, and maintenance.

While insurance premiums and maintenance costs may also be part of a broader net lease arrangement depending on how the lease is structured, property taxes are particularly significant as they are mandatory taxes levied by the government on the property itself. This is a common expectation in commercial real estate, where net leases are often preferred because they transfer several financial responsibilities to the tenant, reducing the risk and financial burden on the landlord.

Utilities, on the other hand, are typically viewed as a separate expense and may not fall directly under the obligations of a net lease. Therefore, while a tenant might pay utilities, the defining characteristic of a net lease specifically emphasizes the tenant's obligation for property taxes.