Contracts
A Kentucky commercial lease contains an escalation clause tied to the Consumer Price Index (CPI). This clause allows:
AThe landlord to raise rent by any amount annually
BRent to increase automatically based on inflation adjustments✓ Correct
CThe tenant to reduce rent if the CPI falls
DEither party to terminate if CPI rises above 5%
Explanation
An escalation clause (CPI clause) in a lease allows rent to increase automatically based on changes in the Consumer Price Index. This protects the landlord from inflation eroding the real value of rent payments over a long-term lease.
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