Florida Real Estate Sales Associate Examination Content OutlineReal Estate Contracts and AgencyEasy
A tenant signs a lease agreement for a commercial property. The lease specifies that the tenant will pay a fixed base rent plus a percentage of their gross sales. Which type of lease has the tenant entered into?
- AGround lease
- BPercentage lease
- CNet lease
- DGross lease
Show answer & explanationAnswer & explanation
Correct answer: B. Percentage lease
A percentage lease is commonly used for retail businesses, where the tenant pays a base rent plus an additional amount based on a percentage of their gross sales.
Why the other options are wrong
- A. A ground lease involves leasing only the land, with the tenant typically owning or constructing the building.
- C. A net lease requires the tenant to pay rent plus some or all property expenses (taxes, insurance, maintenance).
- D. A gross lease typically involves the tenant paying a fixed rent, and the landlord covers most property expenses.
Percentage Lease
A lease agreement in which the tenant pays a base rent plus a percentage of their gross sales or profits.
- Common in retail
- Rent tied to business performance
- Includes a fixed base rent
Memory trick: Gross is all-inclusive, Net adds expenses, Percentage depends on profit, Ground is just the dirt.