Modified gross lease
A commercial lease that splits property costs between landlord and tenant. Common in office buildings. Terms vary widely, so what's included has to be read line by line.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
A modified gross lease splits the building's costs between landlord and tenant, and the split is whatever the lease says. A buyer of a small commercial property reads the split before the rent.
Part 2 of 4
A simple example
Your office tenant pays $3,000 base and their share of utilities and janitorial; you pay taxes and insurance. The lease says exactly which.
| The cost | Who pays under this lease |
|---|---|
| Utilities and janitorial | The tenant, pro rata |
| Taxes and insurance | The landlord |
| Roof and structure | The landlord, in nearly every version |
Modified gross means read the list. The list is the lease's real rent.
Part 3 of 4
What people get wrong
That modified gross is a standard split. There is no standard; every lease draws the line differently.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
One piece of your sale. Here is where all the pieces live.
In your room, this word explains itself where it appears.
Keighbor keeps your whole home sale in one place and defines every term like this one right where you meet it, in the step you're on. Free to set up, with or without an agent.