What type of lease generally requires tenants to pay all operating expenses in addition to rent?

A net lease is a type of lease where tenants are responsible for not only the base rent but also for additional expenses associated with the property. These operating expenses typically cover areas such as property taxes, insurance, and maintenance costs. This structure provides landlords with a more predictable income stream while shifting various financial responsibilities onto the tenants.

In the context of landlord-tenant relationships, net leases are commonly used in commercial real estate, where these additional operating costs can significantly impact the overall cost of occupying the space. The tenants take on these responsibilities, which allows landlords to lower the base rent since part of the tenant's financial obligation is to cover those additional expenses.

In contrast, a gross lease would have the landlord covering all operating expenses, while other options like a license estate reference a type of permission rather than a formal lease agreement. Additionally, a participation lease typically involves some sharing of profits or revenue rather than operating expenses. Understanding these distinctions helps clarify the responsibilities and costs associated with different leasing arrangements in real estate.