Illinois Real Estate Practice Exam

What type of lease allows you to pass the lease to someone else but still receive money from that person and you pay the landlord?

1. Ground Lease

2. Indexed Lease

3. Sublease

4. Building in Ground Lease

The correct answer is: Sublease

The correct answer is sublease. A sublease allows the original tenant to rent out all or part of the leased property to another person (the subtenant) while retaining their obligations to the landlord. In this arrangement, the original tenant continues to pay rent to the landlord, while also collecting rent from the subtenant. This structure maintains the original tenant’s relationship with the landlord, even though the subtenant is in possession of the property. Options like a ground lease and a building in ground lease refer to different arrangements regarding land and property development, where the lessee has rights to develop the property but does not directly involve subleasing. An indexed lease involves rent adjustments based on an index (such as inflation) and does not pertain to the transfer of lease rights to another party. Therefore, sublease is the only choice that captures the essence of the scenario described: transferring a lease interest to another while continuing to pay the landlord.