Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In a Sale-Leaseback Agreement, who sells the property and then leases it back?

1. The grantee

2. The tenant

3. The owner

4. The buyer

The correct answer is: The owner

In a Sale-Leaseback Agreement, the correct party involved is the owner. This arrangement occurs when an owner of a property sells the asset to a buyer and simultaneously leases it back for a specified period. Essentially, the owner converts their equity in the property into liquid cash while still retaining the use of the property through the lease. This structure is commonly used by businesses that need immediate capital but want to continue operations at the same location. The owner benefits from financial liquidity without having to relocate their operations, while the buyer becomes the new owner and earns rental income from the leaseback arrangement. While the other answers may involve parties related to real estate transactions, they do not accurately describe the role specific to a Sale-Leaseback Agreement. The grantee refers to someone who receives a grant of property, the tenant is generally the one renting a property, and the buyer is the party acquiring the property but does not initiate the sale-leaseback process as the owner would.