Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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Prepare for the Texas Real Estate SAE Exam with our educational quiz. Study using flashcards and multiple choice questions, each with detailed explanations to ensure you're ready to pass your exam!

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Which type of lease allows for rent payments to fluctuate based on economic indicators?

Fixed Lease
Graduated Lease
Index Lease
Net Lease

The correct answer is: Index Lease

An index lease is designed to allow rent payments to fluctuate in accordance with certain economic indicators, such as the Consumer Price Index (CPI) or other measures of inflation. This type of lease provides a method for adjusting rent over time to reflect changes in economic conditions, which can protect both the landlord and tenant against the effects of inflation or changes in market conditions. In contrast, a fixed lease stipulates a set rental rate for the duration of the lease term without any adjustments. A graduated lease features predetermined increases in rent at specified intervals, but these increases do not correlate directly to economic indices. A net lease involves the tenant covering additional expenses such as property taxes and maintenance on top of the base rent, but once again, it does not involve fluctuating rent payments based on economic indicators.