A gross lease—also referred to as a full service lease or gross rent or a gross rent lease—is a lease with a fixed monthly or annual rental fee that includes all rent and costs of operating the property, such as utilities, maintenance, taxes, and insurance. In this way, it is similar to a typical residential lease.
A variation of a gross rent lease is a “gross lease with stops”—meaning the tenant will contribute additional amounts if the landlord’s operating costs increase above a certain level. The level at which the tenant is required to contribute additional amounts to the landlord’s operating costs is known as the stop level, as that is where the landlord’s obligation to pay all of the costs (using the fixed rent payments) stops.
In Hawaii, a gross lease is a type of rental agreement where the tenant pays a fixed amount that covers both the rent and all associated property operating costs, such as utilities, maintenance, taxes, and insurance. This arrangement simplifies budgeting for tenants since they do not have to account for variable property expenses. A variation of this is the 'gross lease with stops,' where the tenant agrees to pay additional amounts if the landlord's operating costs rise above a predetermined threshold, known as the 'stop level.' This means that while the landlord covers all costs up to that point, any increases beyond the stop level would be the tenant's responsibility. The specific terms of a gross lease, including any stop levels, should be clearly outlined in the lease agreement to ensure both parties understand their financial obligations. It's important to note that while the concept of gross leases is generally similar across different jurisdictions, the exact regulations and enforceability of such terms can vary based on state law and individual lease agreements.