Which lease type requires the property to be reappraised periodically?

• A. Escalated Lease
• B. Index Lease
• C. Reappraisal Lease
• D. Ground Lease

Answer: (C)

Rent adjustments based on periodic appraisals of the property's value drive this lease type. The agreement calls for regular professional appraisals, and rents are recalculated after each appraisal to reflect the current market value of the property. This keeps payments aligned with how the market values the asset at each interval.

In contrast, an escalated lease uses predetermined increases—such as fixed percentages or amounts—regardless of any appraisal. An index lease ties rent to a published index (like the consumer price index) rather than to an appraisal of the property. A ground lease typically involves long-term use of the land with rent terms that may be fixed or renegotiated by other means, not anchored to periodic property reappraisals.