What type of lease involves rental rates that increase at predetermined times?

A graduated lease is a specific type of lease agreement where the rental rates are set to increase at predetermined times, usually outlined in the lease contract. This structure provides both the landlord and tenant with a clear understanding of how the rental costs will evolve over time. It is often used in commercial leases where the tenant may expect their business revenue to grow, allowing for incremental rent increases that align with their financial outlook.

In a graduated lease, these increases can occur at regular intervals, such as annually or biannually, and are pre-defined, allowing tenants to plan their budgets accordingly. This is beneficial for the landlord too, as it ensures that the rental price keeps pace with inflation and market trends.

The other types of leases mentioned have different characteristics: an assured lease provides a degree of security for the tenant, a fixed lease maintains a constant rent without increases, and a variable lease ties rental rates to a fluctuating market index rather than predetermined increments. In contrast to these, the graduated lease distinctly incorporates planned increases that enhance long-term financial forecasting for both parties involved.