A preliminary, typically non-binding document that summarizes the key economic and legal terms of a proposed lease before a formal lease is drafted and executed.
Letters of intent (LOIs) serve as the framework for lease negotiations. While most LOIs are expressly non-binding, certain provisions — exclusivity, confidentiality, and good faith negotiation obligations — are often made binding. The LOI captures deal economics: rent, term, TI allowance, free rent, renewal options, and termination rights. Once signed, the parties move to full lease drafting based on the LOI terms. Tenants should negotiate the LOI carefully because it sets expectations and creates negotiating momentum; deviating significantly from LOI terms in the final lease creates friction. In a lease abstract, noting the LOI date helps establish the deal timeline.
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