Certified Residential Appraiser Practice Exam

What is the minimum rent stipulated in a lease called?

1. Base Rent

2. Net Rent

3. Fixed Rent

4. Variable Rent

The correct answer is: Base Rent

The minimum rent stipulated in a lease is referred to as base rent. This term signifies the foundational rental amount that a tenant agrees to pay before any additional costs, fees, or adjustments that may be specified in the lease agreement. Base rent is particularly significant in commercial leasing, where it's often the starting point for assessing the total rental obligations of the tenant over the lease's duration. Base rent serves as a consistent figure that can be expected throughout the lease term, regardless of any fluctuations in property expenses or market conditions. Understanding this concept is crucial for both appraisers and lessees, as it lays the groundwork for analyzing the financial implications of the rental agreement. While net rent, fixed rent, and variable rent are all terms related to rental agreements, they refer to specific variations and nuances of rental structures. Net rent typically incorporates additional costs like taxes and maintenance, fixed rent indicates a set amount that does not change over time, and variable rent is contingent on certain factors such as sales or market performance. Each of these options has its own relevance, but base rent specifically identifies the minimum rental obligation defined at the foundational level of the lease.