In the context of a lease,percentage rents generally indicate that:
A)The tenant will pay a proportionate amount of rent for his space in comparison to the total net rentable area
B)In addition to a base rent,the lessor will receive a percentage of the tenant's cash flow above some break even point
C)The tenant will pay a rent that is a certain percentage of the national average
D)None of the above

Question

Quizplus · Accepted Answer

Percentage rents in a lease typically mean that in addition to a base rent, the landlord will receive a percentage of the tenant's cash flow above a certain break-even point. This encourages the landlord to help the tenant succeed in business, as the landlord's income is directly linked to the tenant's performance. Option A is not correct, as it describes a prorated rent based on the space occupied by the tenant. Option C is not accurate, as there is no mention of the national average rent in percentage rents. Option D is incorrect because one of the options is correct, and thus, none of the above cannot be the answer.

In the Context of a Lease,percentage Rents Generally Indicate That