When rent is computed based on the gross sales of a business occupying the property, the lease is classified as a(n):
Correct Answer
D) percentage lease.
percentage lease — because by definition, a percentage lease is one in which rent is calculated as a percentage of the tenant's gross sales, which is precisely the scenario described in the question. This is the standard industry and legal definition used in California real estate practice and tested consistently on the California real estate exam. The other lease types described in the answer choices are defined by entirely different rent calculation methods unrelated to sales volume.
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