What direct payment provision might a lease include regarding personal property taxes?

• A. Lessees pay personal property taxes directly.
• B. Lessor pays all personal property taxes.
• C. Taxes are waived.
• D. Taxes are split 50/50.

Answer: (A)

Direct payment provisions in a lease clarify who handles the tax bill for personal property and how it’s paid. When the lease says the lessee pays personal property taxes directly, the lessee is responsible for sending the tax payments straight to the tax authority, not reimbursing the lessor or having the lessor handle the payment. This keeps tax obligations separate from rent, reduces reimbursement disputes, and helps ensure taxes are paid on time since the tax authority sets its own due dates. Other arrangements—where the lessor pays all taxes, taxes are waived, or taxes are split—do not fit the concept of a direct payment by the lessee to the taxing authority.