Why the Risk versus Reward Ratio for Sublease Options Is Way Out of Whack

First off, the risk versus reward ratio for sublease-options is way out of whack! In other words, the risk potential that is associated with using sublease-options far outweighs the profit potential! There are just too many things that can go wrong with a sublease-option deal, which a lessee has absolutely no control over. For example, during the sublease-option period, any of the following can and usually do occur:

1. The tenant-buyer fails to make lease payments and must be evicted.

2. The tenant-buyer cannot be evicted from the property because a court rules that he or she has an equitable interest in the property and must be foreclosed on instead of evicted.

3. The tenant-buyer commits a wanton act of malicious vandalism and destroys the leased property.

4. The owner refuses to sell the property after the tenant-buyer has exercised his or her option.

5. The owner refuses to sell the property at the agreed-upon purchase price after the tenant-buyer has exercised his or her option.

6. The property under lease-option is damaged or destroyed by fire, storm, or earthquake, and the tenant-buyer must be relocated.

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