Future Business Leaders of America (FBLA) Business Law Practice Exam

What is a sublease?

1. The leasing of property to a third party

2. A shortened rental agreement

3. A permanent transfer of property

4. Absence of a leasing contract

The correct answer is: The leasing of property to a third party

A sublease refers to the leasing of property to a third party, in which the original tenant (the sublessor) rents out the leased property to another individual (the sublessee) while retaining some interest in the lease. This arrangement allows the sublessor to transfer their rights to use the property to someone else for a specified period, but it does not terminate their own obligations to the original landlord. This definition captures the essence of a sublease, highlighting that it involves a temporary letting where the original tenant remains responsible under the primary lease agreement. In many cases, the primary lease will include provisions that dictate whether subleasing is permitted and under what conditions. The other options do not accurately describe a sublease. A shortened rental agreement pertains to the duration of the lease rather than its delegation to another party. A permanent transfer of property suggests a complete transfer of ownership, not just leasing rights, which is not the nature of a sublease. Lastly, the absence of a leasing contract implies there is no formal agreement in place, which contrasts with the concept of a sublease that inherently involves a leasing arrangement.