A modified gross lease is a commercial lease in which the tenant pays a fixed base rent on a monthly or annual basis, but also agrees to pay a proportional amount of the operating expenses for the property, such as:

• taxes

• property insurance

• utilities

• maintenance and repairs (including structures such as the roof), systems (heating, ventilation, and air conditioning and electrical)

• common area maintenance (CAM) such as maintenance of the parking lot, landscaping, maintenance staff, security staff, and maintenance of elevators and escalators.

There are many variations of modified gross leases, with different expenses reimbursed by the tenant to the landlord, and different methods of calculating the tenant’s proportionate share of the expenses.

In New York, a modified gross lease is a type of commercial lease agreement where the tenant pays a set base rent plus a share of certain operating expenses for the property. The specific expenses covered by the tenant can include property taxes, insurance, utilities, maintenance and repairs of structures and systems, and common area maintenance (CAM) costs. The exact expenses and the method for calculating the tenant's share can vary from lease to lease. These terms are typically negotiated between the landlord and tenant and should be clearly outlined in the lease agreement. It's important for tenants to understand which expenses they are responsible for and how these expenses are calculated and billed. Tenants may wish to consult with an attorney to review the terms of a modified gross lease to ensure they understand their financial obligations.