in commercial property rentals, a lease extension agreement allows the business to remain in operation on the property after the original assignment of lease. in this section, the landlord may detail what modifications or improvements a tenant may make to the property for their improved quality of living. the landlord may wish to advertise a property as available for rent and show it to prospective tenants before the end of a lease agreement. a percentage lease requires the business owner to pay rent and a percentage of the revenue they earn on the premises. it’s also important to note that in terms of a lease vs. rent agreement, the terms also differ as well.