The correct answer is B, Lessor/owner. In a traditional sale-and-leaseback, the original property owner sells title to another party but enters into a lease permitting continued occupancy.

The seller becomes the lessee, while the buyer becomes the owner and lessor. The transaction allows the former owner to convert real-estate equity into working capital without necessarily relocating the underlying business.

Massachusetts Board financing curriculum specifically includes sale and leaseback among recognized real-estate financing arrangements.

Candidates should note that the economic substance of a particular transaction matters. Massachusetts tax authorities have recognized that some arrangements labeled “sale and leaseback” may actually function as financing arrangements depending on whether title, possession, and the benefits and burdens of ownership genuinely transfer.

For the conventional licensing-exam scenario, however, title transfers to the purchaser, who becomes the landlord/lessor.

Study Guide Reference: Financing — Sale-and-Leaseback Transactions.