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Real-Estate
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Definition of 'Percentage Lease'


Definition: Percentage lease is a type of lease in which the lessee pays a base rent plus a percentage of revenue generated from any business done in the same rental premise.

Description: In a percentage lease, the landlord receives a percentage of revenue earned from any business in addition to the base rent. Here the base rent is normally lower compared to the normal lease. The low base rent is offset by a higher upside potential associated with percentage lease. The landlord not only shares the profits, but also the losses in the form of reduced rent. This form of relationship is called quasi partnership.
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