The lease term that raises the rent at set intervals, usually by a fixed percentage. The percentage, the interval and whether it also applies to maintenance charges are negotiated and written into the lease.
How it works and what to check
Residential agreements usually raise rent on renewal, often around 5–10%, while commercial leases often raise it every three years by a larger percentage. Neither figure is fixed by law; it is agreed between the parties, subject to any state rent law.
Check whether the increase applies to the rent alone or also to maintenance and CAM, and whether it compounds.