What is a key characteristic of a modified gross lease?

In a modified gross lease, the key characteristic is that certain operating expenses, such as property taxes, maintenance, and insurance, are typically covered by the landlord while others are paid by the tenant. This arrangement provides a balance between a gross lease, where all expenses are included in the rent, and a net lease, where the tenant pays all expenses.

This type of lease is commonly used in commercial real estate, where the landlord may handle some of the common area expenses while the tenant is responsible for utilities or janitorial services. The structure allows for predictability in budgeting for both landlords and tenants, as the lease outlines which expenses are covered and which are not, fostering a clearer understanding of financial obligations from both sides.

The other options do not accurately define the nature of a modified gross lease: a single payment for all services is characteristic of a gross lease, increased flexibility in rent terms does not distinctly define modified gross leases, and having no specified duration would not apply since leases generally have a defined term.