Is an LOI legally binding?

It depends on language and intent. If the LOI contains express binding clauses (for example, for confidentiality or exclusivity) and parties sign with intent, those clauses can be enforced. Clearly label which provisions are binding to reduce ambiguity.

Can an LOI be signed electronically?

Yes. Electronic signatures meet ESIGN and UETA requirements where permitted. Ensure the eSigning method records intent, attribution, and retains a reproducible record to satisfy legal validity tests.

Do LOIs need notarization?

Not generally for leases or LOIs, but some exhibit acknowledgements or recorded documents may require notarization or RON. Check state recording rules and whether any lease exhibit will be recorded.

How should I handle broker commissions?

Include an explicit broker fee clause in the LOI describing responsible party, amount or formula, and timing. Ambiguity about broker obligations often leads to post-closing disputes.

How long should I keep an executed LOI?

Retain for the negotiation period and for several years after the lease ends. For tax or compliance purposes, keep related financial records for at least 3 years; if PHI is involved, follow HIPAA retention rules.

What if a contingency is unmet?

If the LOI specifies a contingency deadline and it is not met, the LOI should articulate the automatic consequences—termination, extension, or renegotiation—to avoid litigation over the parties’ expectations.

Electronic Signature
Templates
Real estate
Letter of Intent to Lease

Letter of Intent to Lease

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

LETTER OF INTENT TO LEASE

This Letter of Intent to Lease ("LOI") sets forth the principal terms and conditions under which Landlord and Tenant propose to enter into a Lease for the property described below. Except as expressly stated in the sections titled Binding Provisions and Confidentiality/Exclusivity, this LOI is non-binding and intended to serve as the basis for preparation of a definitive Lease agreement.

Parties

Landlord Name Landlord Contact Information Tenant Name Tenant Contact Information

Property

Street Address Parcel / APN Number Legal Description of Premises

Term

Lease Term: Commencement Date: Termination Date: Total Term:

Possession Date:

Financial Terms

Proposed Base Rent

Rent Commencement Date: Rent Due Day Each Month:

Security Deposit / Guarantee Initial Reservation Fee (if any)

Reservation Fee Due By:

Late Charge: Grace Period:

Additional Rent / CAM / Taxes

Use, Improvements and Maintenance

Permitted Use of Premises Tenant Improvements / Allowance

Tenant Improvement Completion Deadline:

Maintenance and Repair Responsibilities

Assignment and Subletting Allowed: Yes No

Inspections, Contingencies & Due Diligence

Inspection Period (days):

Inspection and Contingency Details

Disclosures

Lead-Based Paint: Yes No

Known Mold or Water Intrusion: Yes No

Prior Structural or Fire Damage: Yes No

Binding Provisions; Confidentiality & Exclusivity

The parties acknowledge that unless otherwise expressly stated herein, this LOI is non-binding and intended solely to memorialize the basic deal points to be incorporated into a formal Lease. Notwithstanding the foregoing, the following provisions are intended to be binding upon execution of this LOI: Confidentiality, Exclusivity (if elected), Reservation Fee terms (if paid), and Broker Fee allocation.

Confidentiality Elected: Yes No

Exclusivity Period (if any) — Number of days: Exclusivity Elected: Yes No

Broker Name and Fee Responsibility

Broker Fee Payable By:

Defaults, Remedies & Governing Law

Default and Remedies: The definitive Lease will include customary default provisions permitting a non-defaulting party to pursue all available remedies at law or in equity, subject to cure periods where appropriate. The parties agree that in the event a binding obligation under this LOI is breached, the non-breaching party may seek specific performance or damages as provided in the definitive Lease.

Governing Law:

Other Terms

Special Conditions or Additional Provisions

LOI Expiration Date:

A definitive Lease will be prepared on standard form commercially acceptable to the parties and will contain customary representations, warranties, covenants and indemnities. The parties acknowledge that terms set forth herein are subject to completion of due diligence and negotiation of the Lease.

Acknowledgment

By signing below, the undersigned parties acknowledge receipt of this Letter of Intent and indicate their intention to proceed in good faith to negotiate and execute a definitive Lease consistent with the terms set forth above. Execution of this LOI does not obligate either party to enter into a Lease except as to those provisions expressly identified as binding.

Landlord Printed Name:

By:

Date:

Tenant Printed Name:

By:

Date:

What a Letter of Intent to Lease Is and When It’s Used

A Letter of Intent to Lease (LOI to Lease) is a preliminary written document that outlines the key commercial terms parties expect to include in a formal lease. Typical LOI elements include the parties’ names, property description, proposed lease term, rent and deposits, permitted uses, basic responsibilities, and any contingencies such as landlord approvals or financing. An LOI is not usually a final, binding lease; it sets negotiation parameters and can include deadlines for executing the definitive lease, exclusivity windows, or confidentiality provisions that govern further discussions.

Why Use an LOI to Lease Before a Full Lease

A Letter of Intent to Lease clarifies core deal points early, reduces misunderstandings, and helps landlords and tenants focus due diligence. It creates a documented negotiation record that can preserve key economics while the parties finalize legal provisions.

Who Commonly Prepares and Signs an LOI to Lease

Each party should ensure the LOI accurately reflects negotiable items versus terms intended to be binding, and should involve legal review when ambiguity could create unintended obligations.

Tenant representatives: corporate real estate teams or small-business tenants initiating lease negotiations.
Landlords and asset managers: owners or property managers responding to offers and confirming terms.
Brokers and agents: intermediaries who draft or circulate LOIs to start formal lease discussions.

Core Sections to Include in a Professional LOI to Lease

A clear LOI organizes negotiation points so that the resulting lease drafting proceeds efficiently; include concise, unambiguous items and label those intended to be binding.

Parties

Full legal names and contact details for landlord and tenant, including entity type and authorized signers.

Property

Street address, suite or unit number, square footage, and an exhibit or plan reference when precise boundaries matter.

Term

Proposed lease commencement date, initial term length, renewal options, and any early-termination windows.

Rent & Costs

Base rent, escalation method, rent commencement, security deposit, and which operating expenses each party pays.

Contingencies

Conditions precedent such as landlord approvals, zoning, financing, environmental review, or satisfactory inspections.

Binding Status

Explicit statement whether confidentiality, exclusivity, or a broker fee clause is intended to be legally binding.

Essential Data Fields to Capture in the LOI

Tenant Name: Legal entity name

Landlord Name: Legal owner or manager

Premises: Address and square footage

Lease Term: Start date and length

Rent Terms: Amount, frequency, escalation

Contingencies: Approval and due-diligence items

Step-by-Step: How to Complete a Letter of Intent to Lease

Follow these steps to produce a concise, usable LOI that supports negotiation and lease drafting.

01

1. Gather basics: Collect entity names, property details, and authorized signer info.
02

2. Draft core terms: Set rent, lease length, commencement, and deposit amounts.
03

3. Add contingencies: Include approvals, inspections, and any financing or zoning conditions.
04

4. Clarify binding intent: State which clauses are binding (e.g., confidentiality, exclusivity) and which are not.

How the LOI to Lease Moves From Draft to Executed Agreement

The LOI typically serves as the coordination document that triggers due diligence, formal lease drafting, and any required approvals.

Draft circulation: Seller or tenant drafts LOI and circulates to counterparties for review and comment.
Negotiation: Parties negotiate core economics and contingencies until both approve key points.
Due diligence: Tenant completes inspections, title review, and zoning checks referenced in contingencies.
Lease drafting: Legal teams convert agreed LOI terms into a definitive lease for signature.

Sharing, Signing, and eSubmission Options

Choose methods that satisfy the transaction’s need for evidence, and preserve an unalterable signed record for future lease drafting and audits.

Email: Use for informal exchange; lacks built-in audit trail unless combined with signed PDF metadata.
Secure eSignature: Provides signed PDF, timestamp, IP, and signer attribution for enforceability.
Cloud storage: Store executed LOIs in services that support access controls and retention policies.

Common Timing Elements and Recommended Deadlines

LOIs usually specify dates for response, due diligence, lease execution, and any binding short-term obligations; be explicit to avoid missed windows.

Response Deadline:

Set a firm date for acceptance or counteroffer to prevent indefinite negotiation.

Due-Diligence Period:

Specify days (e.g., 30–60 days) for inspections, title review, and approvals.

Lease Execution Target:

Enter a target execution date to coordinate drafting and funding.

Binding Clause Duration:

If exclusivity or confidentiality is binding, set the period (e.g., 30 days).

Contingency Drop-Dead:

Specify when unmet contingencies terminate the LOI automatically.

Common Mistakes to Avoid When Preparing an LOI

Leaving binding and nonbinding language ambiguous, causing unintended obligations.
Failing to name authorized signers, which can delay execution or require ratification.
Using vague monetary terms like 'reasonable rent' instead of a specific amount or formula.
Omitting clear contingency deadlines, leading to disputes over performance timing.

Risks and Consequences of an Inaccurate LOI

Contract Risk: Unclear binding language

Delay Costs: Missed deadlines lead to higher holding or opportunity costs

Financial Exposure: Incorrect deposit or rent terms may trigger disputes

Legal Fees: Extra attorney time for corrections and enforcement

Broker Claims: Undisclosed broker commission obligations can create post-signing claims

Regulatory Risk: Failure to observe zoning or licensing contingencies

Examples: How LOIs to Lease Are Used in Practice

Two representative scenarios show how an LOI frames negotiations and transitions into a lease.

Small Retail Lease

A tenant offers a 5-year term with a tenant improvement allowance

Landlord conditions approval on building permit clearance
The LOI secures the TI amount pending inspection and speeds lease drafting by fixing economics early.

Office Headquarters

A corporation secures an exclusivity window while performing site surveys

Landlord agrees to hold unit off market for 60 days
This LOI prevents competing offers and coordinates due diligence and lease execution timelines.

Practical Tips for Accurate and Efficient LOI Completion

Apply these practical habits to reduce negotiation friction and downstream drafting time.

Be explicit on binding intent

Label confidentiality, exclusivity, and broker fee provisions as binding or nonbinding to avoid inadvertent obligations and litigation risk.

Use precise dates

Provide calendar dates in MM/DD/YYYY format for deadlines to prevent conflicting interpretations.

Attach exhibits

Use attachments for plans, TI budgets, and sample lease clauses so the LOI stays concise while preserving detail.

Limit attorney scope

Ask counsel to focus on dispositive legal terms rather than routine commercial negotiations to control costs.

eSignature Vendor Comparison for Executing an LOI to Lease

Basic price and capability differences among common eSignature providers; signNow is shown first per standard vendor comparison ordering.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes (paid tiers)	Available on plans	Available on plans	Available on plans	Available on plans
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Common Questions About Letters of Intent to Lease

Answers to frequently asked questions that arise when drafting, signing, or relying on an LOI to Lease.

Need help? Contact support

Is an LOI legally binding?
It depends on language and intent. If the LOI contains express binding clauses (for example, for confidentiality or exclusivity) and parties sign with intent, those clauses can be enforced. Clearly label which provisions are binding to reduce ambiguity.
Can an LOI be signed electronically?
Yes. Electronic signatures meet ESIGN and UETA requirements where permitted. Ensure the eSigning method records intent, attribution, and retains a reproducible record to satisfy legal validity tests.
Do LOIs need notarization?
Not generally for leases or LOIs, but some exhibit acknowledgements or recorded documents may require notarization or RON. Check state recording rules and whether any lease exhibit will be recorded.
How should I handle broker commissions?
Include an explicit broker fee clause in the LOI describing responsible party, amount or formula, and timing. Ambiguity about broker obligations often leads to post-closing disputes.
How long should I keep an executed LOI?
Retain for the negotiation period and for several years after the lease ends. For tax or compliance purposes, keep related financial records for at least 3 years; if PHI is involved, follow HIPAA retention rules.
What if a contingency is unmet?
If the LOI specifies a contingency deadline and it is not met, the LOI should articulate the automatic consequences—termination, extension, or renegotiation—to avoid litigation over the parties’ expectations.

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