Legal Question in Real Estate Law in Illinois

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Is it legal to do Sandwich Lease Options in Illinois? The deal would consist of the Owner (Seller), Lessor (Buyer), and Tenant-Buyer. I would be the Lessor (Buyer) and would sign a purchase agreement with the Owner to purchase the home in three years to six years for $189,000 for example. I would also, as the Lessor, give the Owner an Option Fee of $1,000. I would make an agreement to pay rent to the Owner. I would then find a Tenant-Buyer who would give me an Option Fee or Down Payment of $10,000 for the home that I will price at a higher price for $219,000. I will also collect rent from the Tenant-Buyer for a higher price than what I'm paying in rent to the Owner to have a $300-$500 cash flow. The Tenant-Buyer would have an purchase contract to buy the home in 12-18 months, while paying rent and the down payment ($10,000) would count towards the purchase payment of the home, along with the rent they pay. Is it legal to do this in Illinois as the Lessor (Buyer) of the home? Do I need a Real Estate License to do this in Illinois, particularly Cook County Illinois?


Asked on 3/02/15, 12:44 pm

1 Answer from Attorneys
Stephen Messutta

If you are a party to this transaction, are NOT claiming any commission, and are doing your own negotiating and leasing, that is an exception to Illinois licensing. Cook County has no license of its own. If you are attempting to charge any fees for any of this, however, that could be considered commissions or compensation for procuring the sale or lease, then you need an Illinois broker license, and perhaps a local business license.

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Answered on 7/24/15, 11:11 am


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