Part Rent/ Part Comission

I'm wondering if anyone has experience with a part-rent-part-commission setup, either as the renter or the spa owner. Specifically, I am wondering about the legality of an arrangement like that. For example, if a room would rent for $600/month, maybe the therapist would pay $300 (or the spa would withhold the first $300 in earnings?) each month, and the spa would also get maybe 20 or 25% of the therapist's services. It seems like they would be a renter and an independent contractor.

I'd love to learn everything I can about this type of arrangement!

Thanks,
Christine

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Permalink Reply by Relax & Rejuvenate on September 25, 2013 at 5:09pm

So long as it is written as a lease agreement you can do this

Its called base rent + variable rent

Do not withhold anything, make it separate transactions.

Your lessee needs to submit a revenue report -- don't offer to track it yourself, that approaches the line -- but you need to have a good idea how much is going through. Trust but verify.

Also include language of what the rental payments include -- utilities, reception service/scheduling, credit card processing, laundry service etc.

you can also dictate hours of operation -- either specific day, by day or general (60 hours a week).

You can't dictate that only the lessee can use the space -- they can hire employees or subcontract out work to cover the mandated hours.

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Permalink Reply by coldsalineplexus on September 25, 2013 at 9:15pm

Awesome info! SO I would not be able to ring them up through my POS and 1099 them?

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Permalink Reply by Relax & Rejuvenate on September 25, 2013 at 9:25pm

You can, but it needs to be spelled out in the lease agreement " All sales shall be processed and payment received by landlord. Lessee shall invoice landlord for revenue to be claimed" or somethign of the sort. all revenue disbursed shall be reported on a 1099 MISC