Sandwich Lease Option
A sandwich lease is not an option at all.
A sandwich lease is a lease created by a tenant wishing to exit his/her unit as a tenant while not having a "exit option" written into their lease by the landlord.
To provide a mitigation option, one may find a replacement tenant for a unit. This tenant becomes the tenant of the exiting tenant and NOT a tenant of the current, legal landlord. The new lessor, creates whatever policies and rent and deposits he wishes with the new tenant. The new landlord should inform the tenant that their tenancy lasts only until the landlord's lease expires.
If the new tenant seeks maintenance or has any problems whatever with the unit, the "new tenant" must contact her landlord who will then contact the legal landlord for maintenance or repairs.
The new tenant makes all her payments to her temporary landlord who then makes her rent payment and everyone is kept legal and paid up.
When the "proper tenant's" lease is about to expire, the proper tenant submits her 30 day notice of intent to not renew the lease to the landlord—unless the lease is a fixed duration lease—which makes the notice unnecessary.
The 'proper tenant returns for the exit walk-through, and introduces the temporary tenant to the legal landlord and helps the sandwich leasee to become the new, sole tenant, of the unit.
The sandwich lease is ONLY used when the landlord's lease does not provide a pre-expiration date exit from the lease option.
Read more about this topic: Creative Real Estate Investing
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—Vladimir Nabokov (1899–1977)
“Summer’s lease hath all too short a date.”
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