Massachusetts Real Estate License Practice Test 2025 – Complete Exam Prep

An escalation lease is specifically designed to include periodic rent increases that are outlined within the lease agreement itself. This type of lease allows landlords to adjust the rent at predetermined intervals or based on specific economic indicators, such as inflation, increases in property operating expenses, or market conditions. The inclusion of these provisions provides clarity for both landlords and tenants regarding future rent obligations, making it easier to plan finances over the duration of the lease.

In contrast, a flat rent lease maintains a constant rental rate throughout the lease term, not allowing for any increases. A percentage lease typically ties rent to a percentage of the tenant's sales volume, primarily relevant for retail spaces. A gross lease involves a single, flat rate that covers all expenses, including utilities and property taxes, without specifying periodic increases. Each of these alternatives lacks the structured increments found in an escalation lease, which is why the latter is the correct choice for this question.