Which lease commonly uses a fixed schedule of rent increases at regular intervals?

• A. Gross Lease
• B. Net Lease
• C. Graduated Stepped Lease
• D. Percentage Lease

Answer: (D)

Rent escalations are pre-planned increases in rent over the term of a lease. A lease that uses a fixed schedule of rent increases at regular intervals is a graduated (stepped) lease. It lays out exactly when rent rises and by how much, such as a set dollar amount or a fixed percentage at each interval (for example, every year or every two years). This predictability helps both landlord and tenant plan for the future. A gross lease or a net lease describes who pays operating expenses rather than how the rent itself grows, and a percentage lease sets rent based on sales rather than a fixed escalation schedule. So the one that matches a fixed schedule of increases is the graduated stepped lease.