Source: http://journal.firsttuesday.us/forms-download-2/form552-4/
Timestamp: 2017-06-22 23:58:35
Document Index: 374511397

Matched Legal Cases: ['§4', '§4', '§4', '§4', '§4', '§4', '§4', '§4']

Commercial Lease Agreement – Percentage Rent – RPI Form 552-4 | first tuesday Journal
Commercial Lease Agreement – Percentage Rent – RPI Form 552-4
This form is used by a leasing agent or landlord when retail space in a project is leased by a tenant for a fixed-term to grant the tenancy and set the terms for the tenant’s payment of rent in an amount based on a percentage of the tenant’s gross sales.
Your use of RPI Form 552-4
percentage rent provisions for high traffic profitable retail locations. [See RPI Form 552 – 552-4]
Percentage rent provisions are most commonly negotiated with pricy restaurant and retail tenants dependent on high vehicular or foot traffic to drive their sales. [See RPI Form 552-4 §4.4]
While various lease agreements use different formulas for adjusting rent, their rent provisions have one common feature — the base rent — an amount below which monthly rent does not drop. The base rent is the minimum rent paid by the tenant to the owner each month in the event future comparable rent or percentage rent amounts fall lower than the base rent. [See RPI Form 552-4]
fixed for the term of the lease [See RPI Form 552-4 §4.3(a)];
graduated annually over the term of the lease [See RPI Form 552-4 §4.3(b)]; or
inflation adjusted based on the Consumer Price Index for All Urban Consumers (CPI-U) throughout the term of the lease. [See RPI Form 552-4 §4.3(c)]
Base rent may also be adjusted to reflect an increase every few years in the property’s dollar value brought about by local appreciation of comparable properties. This is accomplished in long-term leases by including an appreciation-adjusted rent provision in the lease agreement. These market-rent provisions call for the adjustment to be made every few years, commonly five. [See RPI Form 552-4 §4.3(c)(v)]
The most common base rent adjustment provision used in short-term commercial lease agreements is the graduated rent provision. [See RPI Form 552-4 §4.3(b)]
Inflation-adjusted base rent provisions increase a property’s annual rental income sufficient to match the annual rate of consumer price inflation. An inflation provision calls for annual upward rent adjustments based on figures from an inflation index, such as the CPI-U. [See RPI Form 552-4 §4.3(c)]
supply of available units or space in the local market, an issue of proper zoning activity. [See RPI Form 552-4 §4.3(c)(v)]
Last revised 06-2015.
Provisions 4.3 and 4.4 covering the payment of rent have been better structured to accommodate the separate payment of:
base rent, either fixed, graduated or CPI adjusted; and
additional percentage rent calculated as a percent of the tenant’s annual gross sales, less the amount of base rent paid monthly during the year.
Real Estate Property Management Chapter 41: Nonresidential lease agreements
Real Estate Property Management Chapter 42: Rent provisions in nonresidential leases
Real Estate Property Management Chapter 43: Adjustable rent provisions
Real Estate Property Management Chapter 44: Rent increases and CPI
Real Estate Property Management Chapter 45: Percentage lease rent provisions
Real Estate Property Management Chapter 46: Nonresidential use-maintenance provisions
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