Detailed lease for store space within a shopping center, with an option for rent as a percentage of gross sales.
Shopping Center Lease Agreement - percentage rent option
State:
Multi-State
Control #:
US-808LT
Format:
Word;
Rich Text
Instant download
Description
Definition and meaning
A Shopping Center Lease Agreement with a percentage rent option is a legally binding document that outlines the terms under which a tenant can lease space within a shopping center. This agreement stipulates a fixed base rent along with an additional variable rent, calculated as a percentage of the tenant's gross sales above a predetermined threshold. The percentage rent option incentivizes both landlords and tenants to work together to ensure the success of the retail operation.
How to complete a form
Completing a Shopping Center Lease Agreement involves several important steps:
- Fill in the names and addresses of both the landlord and tenant.
- Specify the location and square footage of the leased premises.
- Detail the base rent amount and any related conditions.
- Determine the percentage rent structure and applicable gross sales threshold.
- Review and complete additional clauses related to use, maintenance, and legal requirements.
It is advisable to review the completed document with a legal professional to ensure all terms are clear and enforceable.
Key components of the form
Essential components of a Shopping Center Lease Agreement include:
- Parties Involved: The names of the landlord and tenant.
- Description of Premises: Details regarding the leased property's location and specifications.
- Rent Structure: The fixed rent and the conditions for calculating percentage rent.
- Lease Terms: The duration of the lease and renewal conditions.
- Usage Clauses: Restrictions or permissions regarding the types of businesses operated within the leased space.
Who should use this form
This form is intended for:
- New and existing retail businesses looking to rent space in a shopping center.
- Landlords seeking to lease commercial property with a shared revenue structure.
- Parties wanting to clearly outline their rights and obligations during the leasing process.
Common mistakes to avoid when using this form
While completing the Shopping Center Lease Agreement, be mindful of the following common mistakes:
- Failing to specify the percentage and threshold for revenue sharing, which can lead to disputes.
- Not including the full legal description of the premises.
- Overlooking local laws and regulations that may impact lease terms.
- Neglecting to review the lease with a legal advisor before finalization.
Benefits of using this form online
Utilizing an online platform to complete the Shopping Center Lease Agreement has several advantages:
- Accessibility: Users can access the form at any time, making it convenient for individuals with varying schedules.
- Guidance: Online forms often provide helpful tips and prompts to ensure all necessary information is included.
- Speed: The digital format allows for quicker completion and submission compared to traditional paper methods.
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How to fill out Shopping Center Lease Agreement - Percentage Rent Option?
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FAQ
A percentage rent provision provides that if the tenant achieves a certain amount of gross sales in a given year, they will pay a percentage of such gross sales to the landlord as additional rent.The tenant, however, will have already paid $100,000 in annual fixed rent.
Percentage rent is typically based on a percentage of the tenant's sales in excess of a fixed base dollar amount, which is often referred to as the breakpoint. The breakpoint is the minimum amount of sales that must be generated at the leased premises before percentage rent is payable.
Percentage rent is that sum a tenant will pay in addition to base (minimum) rent as a percentage of a portion of the tenant's gross sales. A landlord will want the tenant to pay percentage rent to insure it enjoys a share of the tenant's strong sales.
Depending on what you're selling, the standard gross-to-rent percentage can range anywhere from less than 1 percent all the way up to more than 13 percent, with most industries paying below 10 percent.