Contracts
A percentage lease in retail requires the tenant to pay:
AA fixed rent only
BA base rent plus a percentage of the tenant's gross sales above a breakpoint✓ Correct
CA percentage of profits after expenses
DOnly a percentage of rent when occupancy is below 80%
Explanation
A percentage lease requires the tenant to pay a fixed base rent plus an additional amount based on a percentage of gross sales above a natural breakpoint (the point at which the percentage rent kicks in). Common in retail/shopping center leases.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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