The turnover rent clause in the rent contracts
In a large number of the rent contracts, especially in the ones for retail space in the shopping malls, the landlords insist on getting rent, based on the turnover. It is not a fixed sum, but a proportion of the retailer's turnover. This sounds logical, from a market's point of view – the more the tenant sells, the higher rent he pays. But! Here comes the fine print: "but not less than X leva per sq. m.", i.e. the minimum sum the tenant must pay when the portion of the turnover is less than the fixed sum.
In this manner the landlord-investor makes sure his investment would bring a profit, but how about the tenant, who has also made a considerable investment in the store? Because if the tenant goes out of business, the landlord will rent out the space to someone else, but the retailer would have incurred a considerable loss.
The turnover rent clause somehow turns the landlord and the tenant into partners. But the shopping mall is a partner only when the retailer has good days. When the turnover is low, the losses are only for the store. This is unfair. The law provides for enough negotiation freedom, but why is only one side protected? The only market criterion is "One of the two" - either the turnover rent clause or a fixed rent.
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