Missouri Percentage Lease Agreement Overview
A Missouri percentage lease combines fixed base rent with a percentage of gross sales above a negotiated breakpoint. Missouri's retail market is concentrated in two major metros: St. Louis on the east side and Kansas City on the western border. These two markets have meaningfully different retail dynamics, and a percentage lease negotiated for a Country Club Plaza location in Kansas City will look quite different from one for a Chesterfield Mall-area property in suburban St. Louis.
Missouri contract law governs commercial leases, and percentage lease structures are fully enforceable under MO law with no specific statutory requirements beyond what the parties agree to in writing. One important Missouri-specific consideration: St. Louis City and St. Louis County are separate governmental units, and a property's location in one versus the other affects applicable property tax rates and local requirements. Separately, Kansas City properties near the state line may be in Kansas rather than Missouri, so confirming the leased premises' state jurisdiction matters before analyzing Missouri-specific lease provisions.
8%+
Combined sales tax (STL/KC)
Exclude
Sales tax from gross sales
5-7%
Typical percentage rates
STL/KC
Two distinct retail markets
Missouri Requirements
Missouri commercial leases are governed by contract law. A percentage lease should include clear definitions and mechanics for all the following elements to function as intended and be enforceable.
Missouri Sales Tax and Jurisdiction Note
Missouri's combined sales tax rate in St. Louis and Kansas City typically reaches 8 percent or higher when state, county, and city taxes are combined. Excluding these sales taxes from gross sales in any percentage lease is essential. Also confirm whether the property is in St. Louis City, St. Louis County, or which state it is in for KC-area properties before analyzing any local tax or regulatory provisions.
Key Lease Requirements
- Gross Sales Definition: The lease must explicitly define gross sales subject to the percentage, with clear exclusions for Missouri sales taxes, employee discounts, returned merchandise, credit card processing fees, and online transactions not fulfilled from the leased premises
- Natural Breakpoint: Push for a natural breakpoint (annual base rent divided by the percentage rate) rather than an artificial threshold that triggers percentage rent before base rent is effectively covered
- Sales Reporting: The lease should specify reporting frequency (monthly or quarterly gross sales reports) with annual reconciliation and a defined audit period, typically three to five years
- Audit Rights: Landlords typically require the right to audit tenant books once per year, with tenant reimbursing audit costs if a material discrepancy is found
- Co-Tenancy Protections: For St. Louis-area enclosed malls where anchor tenants significantly affect foot traffic, negotiate co-tenancy provisions with meaningful remedies if named anchors close
- Exclusivity Clause: Negotiate an exclusivity provision restricting the landlord from leasing space in the same center to a direct competitor in your product category
- CAM Reconciliation: Define what is included in common area maintenance charges, cap annual increases, and specify the reconciliation process and timeline for disputing landlord calculations
How to File in Missouri
Entering a Missouri percentage lease requires upfront analysis of the specific location's sales potential, careful negotiation of the key economic terms, and ongoing sales tracking systems throughout the lease term. Here is how to approach the process.
Confirm the Property Jurisdiction and Analyze the Location
Before anything else, confirm whether the property is in St. Louis City or St. Louis County, or which state it sits in for Kansas City metro properties near the Missouri-Kansas line. Then research foot traffic, anchor lineup, and comparable sales for your retail category at that specific location. Build conservative and base-case sales projections to evaluate whether the proposed rent structure makes sense before negotiating.
Negotiate the Gross Sales Definition and Breakpoint
Push for an explicit exclusion of Missouri sales taxes from gross sales. Combined sales tax in St. Louis and Kansas City often exceeds 8 percent, making the exclusion economically significant. Negotiate for a natural breakpoint rather than an artificial one. Clarify the treatment of online orders, gift card sales, employee discounts, and returned merchandise before you sign anything.
Address Co-Tenancy, Exclusivity, and CAM Provisions
For enclosed mall tenants in Missouri, negotiate co-tenancy protections with named anchors and meaningful remedies. Request an exclusivity provision preventing the landlord from leasing to a direct competitor in the same center. Review CAM provisions carefully, negotiate annual increase caps, and confirm the reconciliation process. St. Louis-area enclosed malls have seen shifts in anchor occupancy, so co-tenancy protections deserve particular attention.
Have a Missouri Attorney Review the Lease
A Missouri commercial real estate attorney should review the lease before signing. Attorneys familiar with the St. Louis or Kansas City markets can provide practical negotiating context alongside legal review. Missouri attorney rates range from about $200 to $400 per hour. For Country Club Plaza, Clayton, or similar premium locations, the deal size typically justifies more substantial legal spend.
Execute the Lease and Set Up Sales Tracking
After execution, configure your point-of-sale system to generate gross sales reports that match the lease's gross sales definition, excluding Missouri sales taxes and all other negotiated exclusions. Set calendar reminders for monthly or quarterly reporting deadlines and for the annual reconciliation. Retain all sales records for at least the audit period stated in the lease, typically three to five years.
Missouri Fees & Costs
Below is a breakdown of typical costs associated with a Missouri percentage lease. St. Louis and Kansas City rents differ by submarket; ranges below reflect the broader market.
| Fee / Cost | Amount |
|---|---|
| Attorney Review (Recommended) | $200 - $400 per hour |
| Base Rent (Missouri Retail) | $16 - $35 per sq ft per year (suburban); $40+ for premier KC/STL locations |
| Percentage Rent Rate (above breakpoint) | 4% - 8% of gross sales |
| CAM / Operating Expenses | $6 - $16 per sq ft per year |
Sample Missouri Percentage Lease Agreement
Below is a preview of our Missouri-specific template. Your customized document will include all fields and provisions required for filing in any Missouri county.
PERCENTAGE LEASE AGREEMENT
STATE OF MISSOURI
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]
Missouri Percentage Lease Agreement FAQ
Answers to common questions about filing a percentage lease agreement in Missouri, including requirements, fees, and procedures.
Official Missouri Resources
Use these official state resources to verify requirements, find your local filing office, and access government forms for Missouri.
Related Missouri Documents
Depending on your situation, you may need additional documents alongside your Missouri percentage lease agreement.
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