Leases
Percentage lease
A lease where rent includes a share of the tenant’s gross sales
Usually a modest base rent plus a percentage of sales above a stated breakpoint. Retail landlords use it to take a share of the traffic the location generates, which ties the landlord’s return to the tenant’s trade in a way a flat rent never does.
How the exam asks about it
Compute the base rent first, then apply the percentage only to sales above the breakpoint. Applying it to total sales is the standard arithmetic trap.
Quick check: Percentage lease
One question. Pick an answer to see the explanation.
Which term is being defined: “A lease where rent includes a share of the tenant’s gross sales”?
Related terms
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