Illinois Real Estate Practice Exam

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Prepare for the Illinois Real Estate Test. Practice with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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Which lease involves paying a base amount every month plus a percentage of your gross annual sales?

Triple Net Lease
Gross Lease
Percentage Lease
Variable Lease

The correct answer is: Percentage Lease

The correct answer is indeed the percentage lease. This type of lease structure is commonly used in retail and commercial real estate, where the tenant pays a fixed base rent along with a percentage of their gross sales. This arrangement benefits landlords by allowing them to participate in the success of the tenant's business, while tenants find it appealing as their rent can fluctuate with their revenue, potentially lowering their rent during slower months. In contrast, other types of leases serve different purposes. A triple net lease typically requires the tenant to pay not just base rent, but also for property taxes, insurance, and maintenance, making it different from a percentage lease. A gross lease generally includes all expenses in one total rent amount, so the tenant doesn’t pay additional costs based on their sales. A variable lease may involve adjustments to rent based on certain factors, but it does not specifically include a sales percentage like the percentage lease does.