Lease Letter of Intent

What is a Lease Letter of Intent?

A Lease Letter of Intent, sometimes known as a LOI, is a preliminary document outlining the basic terms and conditions under which a lease will be executed.

This letter is usually non-binding and serves as a starting point for negotiations between the landlord and the prospective tenant. It typically outlines key details such as the property's address, the proposed lease term, rent amounts, any tenant improvements, and other key lease terms.

What are the benefits of creating a Lease Letter of Intent?

1. Clarity and Focus: The LOI helps both parties understand the important terms and conditions of the potential lease, and focuses their negotiations on these key aspects.
2. Saves Time and Money: Before drafting a formal lease agreement, which can be time-consuming and expensive, an LOI allows both parties to agree on principal terms. This way, the drafting process is smoother, and there's less chance of misunderstandings or disagreements later on.
3. Flexibility: Since the LOI is generally non-binding, it allows both parties to explore potential lease terms without committing to a formal contract.
4. Expression of Interest: The tenant can use the LOI to express their interest in the property, which might provide an advantage in competitive markets.