Which type of lease requires the landlord to cover all operating expenses?

A gross lease is the correct answer because it stipulates that the landlord is responsible for covering all operating expenses associated with the property. This means that the tenant pays a fixed rent amount, and the landlord takes care of expenses such as property taxes, insurance, maintenance, and utilities. This type of lease is advantageous for tenants since it provides predictable costs, allowing them to budget more effectively.

In contrast, a net lease requires tenants to pay for some or all of the operational expenses, which can include property taxes, insurance, and maintenance costs, making it less predictable for tenants. A percentage lease typically involves the tenant paying a base rent plus a percentage of their sales, which is common in retail settings. An open-ended lease is not a standard leasing term in real estate and does not specifically refer to any particular arrangement.

Understanding these distinctions helps clarify why a gross lease is defined by the landlord assuming responsibility for all operating expenses.