Percentage Lease Law and Legal Definition

Percentage lease is a commercial lease in which the rental amount is computed as a certain percentage of the monthly or annual gross sales generated at leased property. In a percentage lease, the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises. This type of lease is more common in commercial real estate markets where there is a charge for rent, operating expenses, maintenance of common areas, and even a share of the gross revenues generated.