Arizona Real Estate License Practice Exam 2026 – All-in-One Resource to Pass with Confidence!

The correct answer is that this lease is a percentage lease. A percentage lease is characterized by the tenant paying a base rent plus a percentage of their gross sales. In this scenario, Bonnie pays a fixed amount of $600 each month, which represents the base rent, along with an additional 12% of her gross sales from the balloon shop. This structure is common in retail settings where the landlord benefits from the tenant's success and sales performance.

In contrast, a gross lease would typically involve the tenant paying a flat rate that covers all expenses associated with property ownership, such as property taxes and maintenance. An index lease is tied to an economic index, such as the Consumer Price Index, and typically fluctuates over time based on that index. A net lease would involve the tenant paying a base rent plus some or all of the property expenses, which may include taxes, insurance, and maintenance costs, but not a percentage of gross sales like in Bonnie's case.