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Percentage lease

A lease, usually commercial, that bases some rent on a specified percentage of the tenant's sales, often alongside base rent.

In a small plant shop, a property owner and a shop tenant look at a cash drawer, a receipt roll and a lease on a clipboard
  1. Base rent plus a share of sales
  2. Track sales with receipts
  3. Common for shops

Where it matters

Define which sales count, the breakpoint, reporting dates, audit rights, and any exclusions in the agreement.

Explore the related rental resource →
Read the sales definition before applying the percentage

Identify the base rent, percentage rate, reporting period and sales threshold in the actual agreement. A negotiated breakpoint may differ from one calculated from base rent and a rate. IREM's retail-leasing discussion explains how sales-linked rent and negotiated terms affect commercial income. Neither a minimum contractual payment nor a sales forecast guarantees collected income or a lower total occupancy cost.

Original fictional monthly example: the contract requires $2,000 base rent plus 3% of counted monthly sales above a $100,000 breakpoint. If counted sales are $120,000, the excess is $20,000 and percentage rent is $600. The illustrated rent is $2,600 before any separate charges. These chosen terms are not a market rate or a formula for every percentage lease; a different period or clause can produce a different calculation.

Define which sales count and how returns, refunds, online transactions, taxes and other adjustments are handled. Agree reporting dates, supporting records, reconciliation, permitted audit access and confidentiality with qualified advisers. Keep the reviewed clause and calculation evidence together, and resolve discrepancies before relying on a total. Review any proposed term change through the actual amendment process. This definition does not establish automatic percentage-rent calculation or a commercial lease service in Rentari.

This page is general education. The current law, program rules, and specific housing records determine how a rental home is treated. Rentari provides software and written guides, not legal advice or licensed property management.

Put this into practice with Rentari's landlord software, tenant management software and rental property management software.

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