Free Pennsylvania Real Estate Practice Exam Practice Question
The owner of a retail strip mall has a store available for rent and is approached by a prospective tenant who wants to open a business but has little business experience. The owner wants a long-term lease with a fair return overall. Which of the following types of leases would be MOST appropriate?
Correct Answer: D
Rationale: A Percentage lease is ideal for a retail strip mall, especially when the tenant has limited experience. This type of lease allows the landlord to benefit from the tenant's sales performance, aligning both parties' interests and providing the owner with a fair return based on the tenant's success.
A Net lease typically requires the tenant to cover additional costs, which may burden an inexperienced business owner. A Gross lease includes all expenses in the rent, potentially limiting the landlord's return. A Ground lease is suited for long-term land use rather than retail space, making it less relevant in this context.
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