Property Management
In New Mexico, which of the following is TRUE about a 'percentage lease' common in retail settings?
AThe tenant pays only a percentage of their revenue with no minimum base rent
BThe tenant pays a base rent plus a percentage of gross sales above a breakpoint✓ Correct
CThe landlord sets rent as a percentage of the property's assessed value
DThe tenant pays rent based on the percentage of the building they occupy
Explanation
A percentage lease requires a base rent (the 'natural' or 'artificial' breakpoint baseline) plus an overage rent equal to a percentage of gross sales above the breakpoint. Retail tenants in shopping centers commonly use this structure.
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