Which type of lease includes a continuous operations clause?

A continuous operations clause is a provision commonly found in certain lease agreements, particularly in retail settings. This clause requires a tenant to keep their business operational for the duration of the lease term, ensuring that the landlord has steady rental income and that the business remains active in the premises.

In this context, a net lease often includes a continuous operations clause. A net lease typically requires the tenant to pay not only the base rent but also a portion of the operating expenses associated with the property, which can include property taxes, insurance, and maintenance costs. Landlords prefer tenants who maintain continuous operations since it helps preserve the property's value and attractiveness to other potential tenants should the current tenant vacate.

While gross leases and percent leases can also include various operational clauses, they do not inherently emphasize the continuous operations aspect as strongly as net leases do. Gross leases typically include most or all operating expenses in the rent amount but may not always require continuous operations. Percent leases, on the other hand, are based on the tenant's revenue and may involve clauses related to sales continuity in the context of retail but do not generally enforce a strict operational requirement in the same manner as net leases.

Therefore, the presence of a continuous operations clause is most consistently associated with a net lease, making