Are LOIs legally binding?

It depends. If the LOI includes clear, definitive language creating obligations (for example, deposit forfeiture or exclusivity) those provisions can be binding; many LOIs explicitly state that most terms are nonbinding, while certain sections are binding.

Can I sign an LOI electronically?

Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided the parties consent to electronic records and the signature meets intent and attribution requirements.

Do LOIs need notarization?

Generally no; LOIs are private contracts and typically do not require notarization. If a state or specific clause requires notarization, follow that requirement; otherwise notarization is optional.

How do I withdraw an LOI?

Withdrawal depends on the LOI’s terms. If the LOI is nonbinding, notify the other party in writing per any notice provisions. If binding commitments exist, consult counsel before revoking to avoid breach consequences.

Who must sign the LOI?

The person with authority to bind the entity should sign: an authorized officer for companies or an individual tenant. Confirm authority and use the entity’s exact legal name to avoid enforceability issues.

How should I store executed LOIs?

Keep executed LOIs in a secure records system with audit trails. Retain them through the lease term plus several years; follow IRS and HIPAA retention rules where applicable.

Electronic Signature
Templates
Real estate
Tenant Letter of Intent

Tenant Letter of Intent

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

TENANT LETTER OF INTENT

Parties

Tenant Name:

Tenant Contact Address Tenant Contact Phone Tenant Contact Email

Landlord/Owner Name:

Landlord Contact Address

Property

Premises Address Parcel / APN Legal Description

Principal Terms Proposed

Proposed Lease Type:

Lease Term

Term Commencement: Term Expiration: Total Term (months/years):

Rent Rent Commencement Date Additional Rent / Operating Expenses Security Deposit Earnest / Holding Deposit (if any) Tenant Improvement Allowance / Work Parking

Use, Maintenance and Insurance

Permitted Use Repairs & Maintenance Insurance Requirements

Contingencies, Timing and Additional Terms

Inspection Period / Due Diligence Financing / Approval Contingency Desired Closing / Lease Execution Date Exclusivity / Negotiation Period Broker(s) Representing Parties

Disclosures

Lead-Based Paint (applicable to properties built before 1978): Yes No

Known Mold or Water Intrusion: Yes No

Prior Material Structural or Fire Damage: Yes No

Binding Effect & Confidentiality

This Letter of Intent is a statement of the principal terms upon which the Tenant is prepared to lease the Premises and is intended to facilitate preparation of a definitive lease. Except for the provisions expressly stated below as binding, this Letter of Intent is non-binding and neither party shall have liability to the other for failure to reach a definitive lease. The parties agree that the following provisions are binding and enforceable: Confidentiality, Exclusivity (if specified above), Broker Commission obligations as set forth above, and this paragraph concerning binding effect. The parties agree to negotiate in good faith to execute a formal lease containing the material terms set forth herein.

Default and Remedies

If either party materially breaches a binding provision of this Letter of Intent, the non-breaching party may pursue all available legal and equitable remedies. Any monetary deposits described above shall be governed by the terms of this Letter and, if not otherwise agreed, shall be refundable in the event Tenant withdraws for failure of a stated contingency.

Governing Law and Miscellaneous

This Letter of Intent shall be governed by and construed in accordance with the laws of the state in which the Premises are located. This Letter constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior discussions, proposals and representations, except as to any binding provisions expressly set forth herein.

Letter Expiration Additional Provisions / Special Conditions

Acknowledgment

By signing below, the parties acknowledge that they have read and understand the terms set forth in this Letter of Intent and that they are authorized to execute this document. Execution of a definitive lease remains subject to the conditions and contingencies described herein.

Tenant:

By:

Date:

Landlord:

By:

Date:

What a Tenant Letter of Intent Is and When it’s Used

A Tenant Letter of Intent (LOI) is a preliminary written statement from a prospective tenant outlining the basic terms they intend to negotiate in a lease. It typically covers rent, lease term, security deposit, permitted uses, and key contingencies. An LOI can be nonbinding or include binding provisions (confidentiality, exclusivity, or deposit terms), and it helps landlords and tenants confirm deal economics and major obligations before drafting a formal lease.

Why a Tenant Letter of Intent Matters

An LOI clarifies deal points early, reduces negotiation cycles, and documents mutual expectations so a formal lease can be drafted efficiently.

Who Typically Prepares and Receives a Tenant Letter of Intent

Several parties use LOIs to accelerate lease negotiations and record preliminary commitments.

Prospective tenants looking to summarize key lease terms and show good-faith intent to lease a property.
Landlords or property managers who want a concise record of negotiated deal terms before instructing attorneys.
Commercial brokers and leasing agents who use LOIs to align expectations and speed the move to a binding lease.

Use the LOI to reduce errors and prepare the formal lease; confirm whether specific LOI clauses are intended to be binding.

Core Sections to Include in a Professional Tenant Letter of Intent

A clear LOI organises terms so both parties and their advisors can assess whether to proceed to a formal lease.

Parties

Identify landlord and tenant legal names, including DBA or entity type, and provide contact details for notices.

Premises

Describe the space precisely (address, suite, square footage) and include a sketch or reference to floor plan if available.

Term and Rent

State proposed lease commencement, lease length, rent schedule (base rent, CAM, tax obligations), and rent escalation method.

Security & Deposits

Specify security deposit amount, letter of credit or guaranty terms, and conditions for return.

Contingencies

List conditions (financing, landlord approvals, inspection, zoning, or third-party consents) that must be satisfied to proceed.

Binding Clauses

Flag any binding provisions (confidentiality, exclusivity, deposit forfeiture) and note which sections are nonbinding.

Step-by-Step: Completing a Tenant Letter of Intent

Follow these steps in order to create a clear, enforceable LOI and prepare for lease drafting.

01

Gather Parties: Confirm legal names and contacts for landlord and tenant.
02

Define Premises: Record exact address, suite, and square footage.
03

Set Economic Terms: Enter rent, deposit, and escalation specifics.
04

Flag Binding Terms: Explicitly label any binding provisions like confidentiality.

How to Configure an Online LOI Workflow

When using an eSignature platform, set up fields and routing so the LOI flows to each signer in the correct order.

Field	Configuration
Signature Block	Place signature, printed name, title, and date for each party.
Initials	Add initial fields next to key clauses that require explicit agreement.
Conditional Fields	Show deposit instructions only if deposit checkbox is selected.
Routing Order	Send to tenant first, then landlord, then broker for countersignature if applicable.

Digital Signing and Delivery Options for an LOI

Choose an eSignature solution that supports audit trails, common file types, and signer authentication.

File Formats: PDF | DOCX supported; preserve original formatting for legal review.
Signer Authentication: Email + code or SMS OTP; use stronger methods for large deals.
Audit Trail: Capture timestamps, IP addresses, and action history for enforceability.

Ensure the chosen platform meets any industry compliance needs (for example HIPAA for healthcare tenants) and that the parties consent to electronic records under ESIGN.

Where to Send or File the Tenant Letter of Intent

An LOI is usually exchanged directly between parties and their advisors; recordkeeping and distribution should be planned in advance.

To Landlord: Deliver signed LOI to the landlord’s designated representative for countersignature.
To Broker: Provide a copy to the listing or tenant broker for administrative tracking.
To Attorneys: Share with counsel for lease drafting and legal review.
Internal Records: Store in secure document management system and retention repository.

Typical Timelines and Deadlines in an LOI

LOIs often include response deadlines and milestone dates to keep negotiations on schedule.

Response Deadline:

Specify a date for acceptance or counteroffer, commonly 5–14 days.

Exclusivity Period:

State duration (e.g., 30–90 days) during which landlord will not negotiate with others.

Deposit Due:

If required, set a specific due date tied to LOI execution.

Lease Drafting Target:

Set target date for delivery of formal lease draft (often 14–30 days).

Condition Deadlines:

List deadlines for inspections, zoning approvals, or lender consents.

Key Milestones from LOI to Executed Lease

A sequential milestone view helps track progress from LOI acceptance to lease execution.

01

LOI Signed

Parties sign LOI and any binding provisions take immediate effect.

02

Due Diligence

Tenant conducts inspections and verifies zoning and services.

03

Lease Drafting

Landlord counsel prepares formal lease reflecting LOI terms.

04

Final Execution

Parties sign the full lease and exchange any required deposits or guaranties.

Common Mistakes to Avoid When Preparing an LOI

Leaving binding and nonbinding language mixed without clear labels, causing disputes later.
Using vague economic terms (e.g., 'market rent') instead of specific amounts or formulas.
Failing to confirm who has authority to sign, which can delay final lease execution.
Skipping deadlines or exclusivity dates, resulting in unexpected competitive offers.

Risks and Legal Consequences of an Incorrect LOI

Unintended Binding Terms: May create enforceable obligations if parties use definitive language.

Deposit Forfeiture: Deposit clauses can lead to loss of funds if contingencies are not met.

Damaged Negotiating Position: Ambiguity can increase landlord demands during lease drafting.

Regulatory Noncompliance: Industry-specific disclosures or consent requirements may be overlooked.

Tax Consequences: Incorrect lease terms can affect tax reporting or amortization.

Ineffective Signature: Improper signer authority or mismatched names can render LOI unenforceable.

eSignature Vendor Comparison for Tenant LOIs

Compare core pricing and key capabilities relevant to executing LOIs and lease-related documents; signNow is listed first per platform comparisons.

	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	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Real-World LOI Examples and Outcomes

Sample scenarios show how LOIs streamline negotiations across property types and deal sizes.

Small Office Lease

A tenant summarized rent and TI allowance in an LOI to speed landlord approval

LOI included a 30-day exclusivity clause
The landlord delivered a lease draft within two weeks, reducing time-to-occupancy.

Retail Space Negotiation

A retailer used an LOI to lock a short exclusivity while completing due diligence

LOI required a refundable deposit
The deposit was applied to first month's rent after lease execution, preserving the deal.

Frequently Asked Questions About Tenant Letters of Intent

Answers to common legal and practical questions about drafting, signing, and managing LOIs.

Need help? Contact support

Are LOIs legally binding?
It depends. If the LOI includes clear, definitive language creating obligations (for example, deposit forfeiture or exclusivity) those provisions can be binding; many LOIs explicitly state that most terms are nonbinding, while certain sections are binding.
Can I sign an LOI electronically?
Yes. Electronic signatures are valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided the parties consent to electronic records and the signature meets intent and attribution requirements.
Do LOIs need notarization?
Generally no; LOIs are private contracts and typically do not require notarization. If a state or specific clause requires notarization, follow that requirement; otherwise notarization is optional.
How do I withdraw an LOI?
Withdrawal depends on the LOI’s terms. If the LOI is nonbinding, notify the other party in writing per any notice provisions. If binding commitments exist, consult counsel before revoking to avoid breach consequences.
Who must sign the LOI?
The person with authority to bind the entity should sign: an authorized officer for companies or an individual tenant. Confirm authority and use the entity’s exact legal name to avoid enforceability issues.
How should I store executed LOIs?
Keep executed LOIs in a secure records system with audit trails. Retain them through the lease term plus several years; follow IRS and HIPAA retention rules where applicable.

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