What is a master lease agreement?

A master lease agreement is a rental contract where a single tenant (typically an operator, corporate entity, or property manager) leases an entire property or multiple units from the landlord and then sub-leases individual units to end occupants. The master lessee takes on the risk and operational responsibility of finding sub-tenants.

Common Applications in India

• Co-living operators leasing entire buildings from landlords.
• Corporate companies leasing apartment blocks for employee housing.
• Hotel operators leasing properties from individual owners.
• Serviced apartment operators managing units on behalf of multiple individual owners.

Benefits for Landlord

• Guaranteed rental income no vacancy risk.
• Single point of contact for all tenancy matters.
• Professional property maintenance by the operator.

Master lease agreements are attractive to landlords who prioritise income certainty over yield maximisation. The key risk is the master lessee's financial health if they default on the master lease, the landlord may face sudden occupancy gaps and complex sub-tenant situations. Rigorous due diligence on the master lessee is therefore non-negotiable before entering this structure.