- Definition: Percentage Rent
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Many landlords attempt to negotiate an additional rent based upon tenant’s sales that exceed certain levels. It is generally regarded as landlord’s protection against “runaway inflation” but in actual practice provides the landlord with an extra source of income if the tenant becomes more successful than originally anticipated. Tenants do not seem to object so long as the percentage rent stays within the occupancy costs ratios that the tenant is accustomed to paying.
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