National Real Estate Exam (PSI)Leasing and Property ManagementMedium
A tenant signs a lease for a retail space in a shopping mall. The lease agreement stipulates a base rent of $2,000 per month, plus an additional 5% of gross sales exceeding $50,000 per month. What is the total rent due for a month in which the tenant generates $80,000 in gross sales?
- A$4,000
- B$3,500
- C$4,500
- D$2,000
Show answer & explanationAnswer & explanation
Correct answer: B. $3,500
The excess sales are $80,000 - $50,000 = $30,000. The additional rent is 5% of $30,000, which is $30,000 * 0.05 = $1,500. The total rent is the base rent plus the additional rent: $2,000 + $1,500 = $3,500.
Why the other options are wrong
- A. This might be a miscalculation, perhaps 5% of $40,000 instead of $30,000.
- C. This might be a miscalculation, perhaps 5% of $50,000 instead of $30,000.
- D. This is only the base rent, not accounting for the percentage rent.
Percentage Lease Calculation
A lease where rent is calculated as a base amount plus a percentage of the tenant's gross sales above a certain breakpoint.
- Common in retail properties.
- Landlord benefits from tenant's success.
- Requires clear definition of 'gross sales' and breakpoints.
Memory trick: PERCENTAGE is 'Base + Over-Base Percent'.