Percentage rent is used in retail leases where the landlord has bargaining power to demand a share of the tenant’s economic gains. Demand for retail space may be high or a landlord’s specific location may be particularly attractive such that the tenant is willing to pay not only a fixed amount of rent but a share of its gross revenue. These types of leases require a sophisticated understanding of the underlying economics of tenant’s business.These leases also require very careful drafting. How is gross revenue defined? Is there a minimum amount or a maximum amount? How are these numbers verified? And what are all the related protections for the landlord or the tenant? This program will provide you with a practical guide to negotiating and drafting percentage leases.
Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for GAL Certification, ethics, elimination of bias or Kansas credit.
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