What is a lease in which the rental rate changes based on business volume called?

A lease in which the rental rate changes based on business volume is known as a percentage lease. This type of lease commonly used in retail situations allows landlords to collect a base rent plus a percentage of the tenant's gross sales or business revenue. This arrangement aligns the interests of both the landlord and the tenant, as the rental income for the landlord increases when the tenant's business performs well, while also giving the tenant the potential for lower costs during lower sales periods.

In contrast, a fixed lease involves a set rental rate that does not change regardless of business performance. An escalating lease typically means that the rent increases at predetermined intervals but does not base those increases on actual business volume. Variable scale lease is not a standard term commonly used in property management terminology, making it less relevant in this context.