Percentage Lease

A lease arrangement used with many commercial retail properties, in which the lessee's rent is based on the gross business revenue that the lessee generates through the leased premises. Such an arrangement would require continuous and full financial disclosure by the tenant of the tenant's business activities. This may be either a gross lease or net lease arrangement, but there is usually a minimum rent amount and a recapture clause allowing the lessor to reclaim the property if minimum sales are not met. For more information, see the "All About Leases" article in the "Real Estate In-Depth" section.

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