What defines a graduated lease?

A graduated lease is characterized by its predetermined rental increases that occur at specified times during the lease term. This arrangement allows the tenant to anticipate future rent costs, making it easier for them to budget. For instance, a graduated lease might start at a lower rent in the first year, with agreed-upon increases each subsequent year, creating a gradual increase that helps both the landlord and tenant manage financial expectations.

The other options do not accurately describe a graduated lease. A lease with the same rent for the entire duration would be a fixed lease. A lease with no scheduled increases implies stability without planned escalations in cost, while a lease that automatically renews annually focuses on the renewal terms rather than the structure of rent payments. Thus, specifying that a lease includes specific rent increases is what makes it a graduated lease.