DC Property Manager (PM) Practice Exam

This question tests how a percentage lease calculates rent. In a percentage lease the tenant pays a base rent fixed amount plus a portion tied to the business’s gross sales. This structure aligns the landlord’s income with the tenant’s performance—as sales go up, rent rises accordingly. There is often a breakpoint, so once sales exceed that level, a percentage of the excess is charged as additional rent, though many explanations frame it as a percentage of gross sales above the breakpoint. For a simple illustration, imagine a base rent of 4,000 per month with a 5% rate on sales over a 200,000 annual breakpoint; if sales stay under the breakpoint, you pay only the base rent, and if they exceed it you pay base rent plus 5% of the excess. This is distinct from fixed rent, rent plus taxes and insurance, or rent plus maintenance, which do not tie rent to sales performance.