What does a graduated lease entail?

A graduated lease involves a rental agreement where rates are set to change at pre-determined intervals over the lease term. This structure provides both the landlord and tenant a clear expectation of how costs will evolve, allowing tenants to plan their budgets accordingly while also aligning the landlord's income with market trends and inflation.

This approach often handles situations where property values may rise, offering tenants a predictable increase schedule rather than fluctuating rates based on external market conditions. The other options do not encapsulate the essence of a graduated lease; for instance, constant rates suggest stability without adjustment, periodic re-evaluation might imply a more dynamic rental structure, and sales percentages would indicate lease terms tied to performance rather than a set schedule for rate increases. Thus, the essence of a graduated lease is captured in the notion of planned changes at specific times.