Modified Gross Lease Agreement Template

MODIFIED GROSS LEASE AGREEMENT TEMPLATE FAQ

What is a Modified Gross Lease Agreement?

A Modified Gross Lease Agreement is a commercial lease where the tenant pays a fixed base rent and also takes on some — but not all — of the property’s operating expenses. For example, the landlord may cover taxes and insurance while the tenant pays utilities, or certain costs may be shared.

How is a modified gross lease different from a gross or triple net (NNN) lease?

In a full gross lease, the landlord usually pays most operating expenses and bundles them into the rent. In a triple net (NNN) lease, the tenant typically pays base rent plus most operating costs. A modified gross lease sits in the middle: some costs are included in rent, while specific items (like utilities or a share of taxes) are passed through to the tenant.

What should a Modified Gross Lease Agreement include?

A clear modified gross lease should identify the parties and premises, define the lease term, base rent, and which expenses are included in rent. It should also spell out which operating costs the tenant must pay separately or share, plus maintenance duties, insurance requirements, default rules, and signature blocks.

What costs are typically passed through to the tenant in a modified gross lease?

It varies, but common arrangements include the tenant paying separately for utilities, janitorial services, and sometimes a portion of property tax increases, insurance increases, or common area maintenance (CAM). The agreement should clearly list which expenses are tenant costs and how they are calculated.

Is a modified gross lease suitable for small businesses and offices?

Yes. Modified gross leases are often used for office space, professional suites, and small retail or commercial units where parties want predictable base rent but still share some operating costs in a fair way.

Can AI Lawyer help me customize this Modified Gross Lease Agreement?

Yes. AI Lawyer can help you tailor this Modified Gross Lease Agreement with your property details, rent structure, and cost allocations so you have a clear, balanced document ready to review and sign.