A lessee agreed to pay property tax and hazard insurance as well as rent. What type of lease is this?

In the scenario described, the lessee’s obligation to pay property tax and hazard insurance in addition to rent characterizes this as a net lease. A net lease is one where the tenant (lessee) is responsible for additional costs associated with the property beyond just the basic rent. These costs typically include property taxes, insurance, and maintenance expenses.

This arrangement benefits landlords since they secure a more stable income stream without having to cover these additional costs, while lessees gain the benefit of potentially lower base rent in exchange for taking on some of these expenses. In contrast, a gross lease would involve the landlord covering these extra expenses, and a percentage lease generally includes rent that is based on a percentage of the business’s sales, which does not apply here. A proprietary lease is typically associated with cooperative housing and does not fit the context of property taxes and hazard insurance responsibilities.