Updated April 14, 2023
A percentage (%) lease agreement is between a landlord and a tenant that agrees to pay a portion of their sales in rent. Percentage leases have been used in the past as a hedge against inflation. The tenant will be required to keep a record of their gross receipts and commonly pay on a quarterly or annual basis.
How is Percentage Rent (%) Paid?
The tenant will pay a base amount + percentage (%) of sales = total rent.
Payment of Percentage (%) Rent
Due to the added layer of calculating the percentage of gross sales, the landlord will require that it must be done each quarter or annually. It is typically not paid on a monthly basis.