Question

A tenant enters into a commercial lease that requires a monthly rent of a minimum fixed amount, plus an additional amount determined by the tenant's gross receipts exceeding $5,000. This type of lease is called a

A) percentage lease.
B) net lease.
C) gross lease.
D) standard lease.

Answer 1

A) percentage lease

Step-by-step explanation:

Just as its name suggests, percentage leases are determined by a fixed amount and a percentage of the total sales of the lessee business. This type of lease usually applies to renting of commercial real estate only. It is common for percentage leases to include 6-10% of the gross sales of the lessee, but the fixed amount is usually much smaller than regular rent prices.