If a tenant is required to pay additional amounts to the landlord, what type of lease do they likely have?

Prepare for the California Property Management Exam. Practice with flashcards and multiple choice questions, with hints and explanations for each. Get ready for your certification!

A percentage lease is characterized by a tenant paying rent based on a percentage of their sales or revenue. This type of lease is commonly used in retail spaces, where the landlord benefits directly from the business's success. In this arrangement, in addition to the base rent, tenants may be required to pay additional amounts linked to their sales performance, which means a direct correlation between the tenant's business activity and their rental obligations.

In contrast, a gross lease usually has the landlord covering property expenses such as maintenance, taxes, and insurance, which results in a fixed rent amount for the tenant without additional costs. A fixed lease typically refers to a traditional arrangement with a set rent amount over a specific period without additional variable costs. An appreciation lease is not a standard term in property management and would not typically apply in this context.

The requirement for a tenant to pay additional amounts suggests a structure that aligns more closely with the performance or sales of the tenant's business, making the percentage lease the most suitable answer.

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