California Real Estate Practice Exam

What is Tenant A's interest called in a sublease scenario?

1. Primary lease

2. Secondary lease

3. Sandwich lease

4. Subtenant lease

The correct answer is: Sandwich lease

In a sublease scenario, Tenant A, who is the original tenant, retains certain rights to the leased property while also granting a portion of their lease rights to another individual, known as the subtenant. The term "sandwich lease" refers to the structure of this arrangement, where the original tenant (Tenant A) is sandwiched between the landlord and the subtenant. In this context, Tenant A maintains their original lease with the landlord while creating a new lease agreement with the subtenant. This effectively makes the original tenant a lessor to the subtenant, and they hold an interest in the property that is secondary to their lease with the landlord. It is this middle-ground position that gives rise to the term "sandwich lease," since Tenant A operates between two leasing relationships. The other terms do not accurately describe Tenant A's interest in this subleasing scenario. The term "primary lease" typically refers to the original lease with the landlord, "secondary lease" is not a commonly used term in this context, and "subtenant lease" specifically describes the lease of the subtenant rather than the interest of Tenant A. Understanding this structure is crucial for navigating real estate agreements effectively.