Underlease Law and Legal Definition
Underlease is a grant by a lessee to another of a part of his interest under the original lease, reserving to himself a reversion. The lessee is then called an underlessor, and his assignee an underlessee.
An underlease for the whole term is an assignment. But, an underlease vests only a partial estate in the second lessee, a reversion being left in his lessor whereas an assignment transfers the whole interest of the first lessee to the assignee. [Consol. Coach Corp. v. Consol. Realty Co., 251 Ky. 614 (Ky. 1933)].