What type of commercial lease requires the tenant to pay a base rent plus a percentage of their gross sales revenue?
Correct Answer
C) Percentage lease
A percentage lease requires tenants to pay base rent plus a percentage of gross sales, commonly used in retail properties. This structure allows landlords to benefit from successful tenant businesses while providing a minimum guaranteed income through base rent.
Why This Is the Correct Answer
A percentage lease is correctly defined as requiring tenants to pay base rent plus a percentage of gross sales revenue. This lease structure is specifically designed for retail properties where landlords want to benefit from successful tenant operations while maintaining guaranteed minimum income through base rent. The percentage component typically ranges from 1-10% of gross sales, depending on the business type and location. This arrangement aligns landlord and tenant interests, as both benefit from increased sales volume.
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