In what situation is a lease most likely considered a net lease?

A lease is most likely considered a net lease when the tenant is required to pay property taxes. In a net lease structure, the tenant agrees to pay not only the base rent but also some additional expenses that are typically associated with property ownership. These expenses often include property taxes, insurance, and maintenance costs. By requiring the tenant to cover property taxes, the landlord reduces their financial obligations, which is a hallmark of net leases.

This arrangement benefits landlords by providing a more predictable income stream while allowing tenants to have some control over the expenses they incur. In contrast, other options describe situations that do not fit the net lease definition. For instance, if the tenant pays only utilities, this arrangement may fall under a different lease structure where the landlord retains more financial responsibility. A scenario where the landlord covers all expenses aligns more with a gross lease, where the tenant pays a single, inclusive rent amount. Similarly, if the tenant pays a set amount irrespective of costs, this does not reflect the variable nature of expenses typically associated with a net lease. Thus, requiring the tenant to pay property taxes clearly indicates a net lease scenario.