Legal Term
Percentage Rent Trap in a Comic Book Store Sublease
Legal Definition
A contractual provision in a sublease for a comic book retail business where the subtenant's rent is calculated as a base amount plus a percentage of their gross sales. A 'trap' refers to overly broad, ambiguous, or hidden definitions of 'Gross Sales' and related audit rights that can lead to unexpected, substantial rent overcharges and costly disputes.
In Plain English
A sneaky clause in a shop-in-a-shop lease that makes your rent go up based on your sales. If the rules for counting 'sales' are written poorly, you could owe a lot more rent than you planned, even on things like online orders or special events.
Example in a Contract
**Section 4. Rent – Percentage Component.**
(a) In addition to the Base Rent, Subtenant shall pay Additional Rent equal to five percent (5%) of 'Gross Sales' (as defined below) in excess of $500,000 per Calendar Year.
(b) 'Gross Sales' means all gross receipts from the sale of all merchandise, including but not limited to comic books, graphic novels, collectibles, and related merchandise, whether sold at the Premises, via mail order, internet, or at any off-premises event, without any deductions for costs, returns, or taxes. Sublandlord shall have the right to audit Subtenant's sales records annually upon 30 days' notice, and if an audit reveals an underpayment of more than 2%, Subtenant shall reimburse Sublandlord's audit costs.
This content is for informational purposes only and does not constitute legal advice. Always consult a licensed attorney for legal matters.