A leasehold interest
in a property created by means of a sublease
from the lessee to sublessee. In a sandwich
lease, the original leasee conveys part of
the leasehold interest to sublessee, while
retaining an interest in the property.
In sandwich lease,
the original lessee typically collects a fee
above the original lease from the new
tenant, thus generating profit for providing
the sublease.
The sandwich lease
creates three interest in the property; the
landlord (lessor), original tenant and the
sublease tenant (sublessee).
We have seen
investors, getting into leases in highly
demanded areas, just so they can simply
sublease them for profit.
Please exercise
caution, as entering into a lease those
create an obligation under that lease to the
landlord and may result in financial loss if
the lease is broken.
Most lease contracts
will state that the landlord will not object
to the lessee subleasing the premises as
long as the new lease confirms with the old
one.
A sublease is not an
assignment of contract and therefore the
making the the previous tenant responsible
under contract to the landlord.
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