Florida Broker Practice Exam

Which type of lease typically includes a base rent plus additional sales-based rent?

1. Variable lease

2. Percentage lease

3. Fixed lease

4. Net lease

The correct answer is: Percentage lease

A percentage lease is commonly used in commercial real estate, especially in retail settings, where the tenant pays a base rent along with additional rent that is calculated as a percentage of the tenant's sales revenue. This type of leasing arrangement aligns the interests of the landlord and tenant, as the landlord benefits from the tenant's success by sharing in the profits. The base rent provides a guaranteed income level for the landlord, while the percentage component can incentivize the landlord to support the tenant's business to drive higher sales. In contrast, other lease types such as variable leases can have fluctuating terms but do not specifically tie rent to sales performance. A fixed lease involves a set, unchanging rental amount, and a net lease requires the tenant to pay additional costs like property taxes, insurance, and maintenance, but does not typically involve a performance-based component tied to sales. Thus, the identifying characteristic of a percentage lease is the direct correlation of rent to sales, making it unique in leasing arrangements.