leasing

index lease

An index lease is a lease in which the rent is periodically adjusted up or down based on changes in an economic index, most often the Consumer Price Index (CPI). It protects the landlord from inflation over a long lease term while tying rent changes to an objective measure rather than fixed increases. Index leases differ from graduated leases, which raise rent by set amounts on a set schedule.

Exam tip
Index lease = changes tied to an index (CPI); graduated lease = scheduled step increases. Don't mix them up.
Example
A tenant pays $4,000 a month; the lease raises rent by the annual CPI change, so a 3% CPI increase makes the new rent $4,120.

Related terms & state variants

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Last verified: 2026-10-23