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The Step Lease

The second of five leases defined this week

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The step lease attempts to cover the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of the agreement. The problem with step leases is that they are based on estimates rather than actual costs, and there's no way for either party to be sure in advance that the proposed increases are fair and equitable.

Excerpted from Start Your Own Business: The Only Start-Up Guide You'll Ever Need