Louisiana Percentage Lease Agreement Overview
A Louisiana percentage lease is a retail lease structure combining a fixed base rent with a percentage of the tenant's gross sales above a defined threshold. Louisiana is the only U.S. state governed by civil law rather than common law, and commercial leases are governed by the Louisiana Civil Code, Articles 2668 through 2729. The Civil Code's default maintenance obligations and the automatic lessor's privilege over tenant movables both apply to percentage leases and must be addressed in the lease.
New Orleans and Baton Rouge are Louisiana's primary retail lease markets. New Orleans Canal Place, Lakeside Shopping Center, and Clearview City Center all use percentage lease structures for inline retail tenants. New Orleans' French Quarter retail properties often use percentage structures for tourist-oriented shops and food-and-beverage tenants where seasonal sales volatility makes a pure fixed-rent structure unworkable. Louisiana imposes no statewide commercial rent tax, so the percentage rent calculation is not complicated by a state tax overlay.
$55
Filing fee
Required
Notarization
2
Witnesses required
Clerk
Filing office
Louisiana Requirements
Louisiana percentage leases must comply with the Civil Code and be properly executed and recorded to protect both parties under Louisiana law.
Louisiana Specific Note
The Louisiana lessor's privilege under Civil Code Article 2707 attaches automatically to a retail tenant's inventory, fixtures, and equipment at the leased premises without any filing or registration. For New Orleans retail tenants with inventory-backed business loans, this creates a conflict with the lender's security interest that must be resolved in the lease through a privilege subordination agreement. Failure to address this issue can block the tenant from obtaining financing after the lease is signed.
Document Requirements
- Civil Code Compliance: The lease must comply with Louisiana Civil Code Articles 2668 through 2729 governing lessor and lessee obligations
- Gross Sales Definition: A precise written definition specifying inclusions and exclusions, including Louisiana and parish sales tax, returns, employee sales, and online orders fulfilled elsewhere
- Lessor's Privilege Provisions: The lease must address whether the lessor's privilege is preserved, waived, or subordinated to a lender's security interest
- Authentic Act Execution: For recording in parish conveyance records, the lease must be signed before a Louisiana notary with two witnesses as an authentic act
- Audit Rights: Include landlord audit rights, reporting frequency, and cost-shifting provisions for material understatements of gross sales
How to File in Louisiana
Louisiana percentage lease drafting requires Civil Code awareness and proper execution procedures from the outset. Standard common-law forms will not work in Louisiana.
Retain a Louisiana-Licensed Attorney
Louisiana's civil law system requires attorney involvement in any significant commercial percentage lease. The attorney should understand both the Civil Code lease articles and the specific parish retail market. New Orleans retail percentage leases have different market practices than Baton Rouge suburban centers, and the attorney should know those differences.
Negotiate the Gross Sales Definition and Percentage Rate
Draft a detailed gross sales definition covering Louisiana and parish sales tax exclusions, returns and refunds, online order exclusions, and employee discount sales. Set the percentage rate and determine whether the breakpoint is natural or artificial. New Orleans tourist retail and French Quarter food-and-beverage tenants typically negotiate seasonal provisions given the city's uneven sales calendar.
Address the Lessor's Privilege and Civil Code Provisions
The lease must expressly address the lessor's privilege and any Civil Code maintenance obligations the parties want to modify. Include a privilege subordination clause if the tenant has or expects to have lenders with security interests in store inventory or equipment. Address Civil Code Article 2691 maintenance default rules for any maintenance obligations the landlord wants to shift to the tenant.
Execute as Authentic Act
For recording in parish conveyance records, the lease must be signed before a Louisiana notary public with two disinterested witnesses present. This authentic act form is required for recordation. The Louisiana notary's role is more significant than a notary in common law states because the notary ensures the act is properly executed under Civil Code requirements.
Record in Parish Conveyance Records
Record the authentic act lease or a memorandum in the parish clerk of court's conveyance records. For New Orleans (Orleans Parish) properties, file with the Clerk of Civil District Court. Recording fees vary by parish and document length but typically begin at $55 for the first page in most Louisiana parishes.
Louisiana Fees & Costs
Below is a breakdown of the typical costs associated with filing this document in Louisiana. Actual fees may vary by county.
| Fee / Cost | Amount |
|---|---|
| Base Rent (New Orleans / Baton Rouge retail) | $14 - $32 per sq ft annually |
| Percentage Rent Rate | 3% - 8% of gross sales above the breakpoint |
| Louisiana-Licensed Attorney | $1,200 - $4,000 |
| Parish Conveyance Recording (authentic act) | $55 first page plus per-page fees; varies by parish |
Sample Louisiana Percentage Lease Agreement
Below is a preview of our Louisiana-specific template. Your customized document will include all fields and provisions required for filing in any Louisiana county.
PERCENTAGE LEASE AGREEMENT
STATE OF LOUISIANA
Legal Document Template
LANDLORD
Name: [Full Legal Name / Entity]
Property: [Shopping Center Name]
Address: [Property Address]
TENANT
Name: [Business Entity Name]
Trade Name: [DBA / Store Name]
Address: [Current Address]
Tax ID: [EIN]
PREMISES
Suite: [Number]
GLA: [Gross Leasable Area SF]
Use: [Permitted Retail Use]
Exclusive: [Product Category]
FINANCIAL TERMS
Base Rent: $[Amount]/month
Percentage Rate: [%]
Breakpoint: $[Amount]/year
CAM: $[Amount]/SF
Deposit: $[Amount]
Louisiana Percentage Lease Agreement FAQ
Answers to common questions about filing a percentage lease agreement in Louisiana, including requirements, fees, and procedures.
Official Louisiana Resources
Use these official state resources to verify requirements, find your local filing office, and access government forms for Louisiana.
Related Louisiana Documents
Depending on your situation, you may need additional documents alongside your Louisiana percentage lease agreement.
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