Sandwich Lease Law and Legal Definition

Sandwich lease is a lease agreement in which a lessee subleases a property to a third party. In a basic sandwich lease, a person leases a property from the landlord and then sublets the property to a third person. The new tenant pays a higher fee which allows the original lessee to pay the rent to the landlord and to keep the difference making a small profit. The original lessee acts as a landlord to the new lessee, although s/he is not the real owner. However, not all property owners will allow a sandwich lease and those who do may only do so with certain restrictions.