Back-to-Back Lease Law and Legal Definition

Back-to-back lease is an agreement made by a landlord. In this agreement, the landlord agrees to take over the tenant's existing lease in return for the tenant's agreement in order to lease existing space in the landlord's commercial building. This acts as a concession to a prospective tenant. According to the back-to-back lease agreement, the landlord agrees to pay the tenant's rent at their old space until the expiration of the term, if the tenant will immediately vacate and move to the new space. In such a situation, the landlord will offer to buy out the entire current lease, paying a lump sum to the owner of the other building. The other building owner is generally motivated to accept the lump-sum payment, because he or she anticipates giving for rent the vacant space to a new tenant quickly and consequently to gain a huge amount in the form of the buyout price.