A letter of intent to lease commercial property is a short letter in which a landlord offers a tenant the basic terms and conditions of a future lease agreement. It serves as the basis for the further comprehensive agreement between a landlord and tenant but might already act as a binding agreement if the parties decide so. A tenant who receives this form can accept or decline the terms, and a signature shows acceptance.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
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A letter of intent is the first written step in a commercial lease deal. It lets a landlord and a tenant check that they agree on the big points before either side pays for a full lease. Use it when you have found a space you like and want to settle the rent, the term and the use first.
The letter also helps in a few other situations:
The letter of intent to purchase real estate helps both parties enhance the process of negotiations and learn each other’s expectations before they enter into a formal agreement.
A letter of intent is the best chance for a landlord and tenant to learn each other’s intentions. To reach an agreement, a landlord or property manager can use this checklist when writing the letter:
Keep the letter focused on the key business terms. Save the fine print, such as repair duties or insurance wording, for the final lease agreement.
Commercial leases use a few terms that residential renters rarely see. Knowing what each one means helps you fill in the letter with confidence. The table below explains the terms used most often in a letter of intent to lease commercial property.
| Term | What it means | Where it goes in the letter |
|---|---|---|
| Base rent | The fixed amount the tenant pays for the space, usually stated per month or per year. | Rent provisions |
| Gross lease | The tenant pays one flat rent and the landlord covers most operating costs. | Rent provisions |
| Modified gross lease | The tenant and landlord split the operating costs, and the letter lists which costs each side pays. | Rent provisions and operating expenses |
| Triple net lease | The tenant pays the base rent plus property taxes, insurance and maintenance. | Rent provisions and operating expenses |
| Common area maintenance | The cost of keeping shared areas such as hallways, lobbies and parking lots in good shape. | Operating expenses |
| Security deposit | An amount the tenant pays at the start of the lease as protection for the landlord. | Security deposit |
| Tenant improvements | Changes to the space that the tenant asks for, such as new walls, lighting or paint. | Use or a separate line |
The steps below follow the order of the template, from the parties at the top of the letter to the signatures at the bottom. Fill in each part with the details of your own deal. If a part does not apply to your deal, you can leave it out of the letter.
Step 1 – Information about the parties and the effective date
In the top left corner of the letter, write:
Step 2 – Address of the premises
Write the full address of the rental space. Add the suite or unit number and the approximate square footage if you know them.
Step 3 – Lease term
The lease term is one of the most important details in the letter. Say when the initial lease term starts and when it ends.
Step 4 – The purpose
Describe how the tenant will use the space, for example “office space” or “retail store.” A short, clear description is enough.
Step 5 – Rent price
Say how much rent the tenant pays and how often. Write the price in words and in numbers, as the sample letter below does.
Step 6 – Late rent
Say when rent counts as late and what late charge applies if the tenant pays after that date.
Step 7 – Expenses
This section should tell what additional expenses the tenant should pay along with the base rent. Examples include common area maintenance or any other costs related to the rental property.
Step 8 – Security deposit
Write the amount of the security deposit that the tenant pays to the landlord.
Step 9 – Renewal of the lease
Say whether the tenant can renew the lease at the end of its term. The section should tell what the tenant should do if the renewal is allowed (generally, send a prior written notice).
Step 10 – Subletting
Say whether the landlord gives consent to sublet the rental space. If subletting is allowed, the landlord might mention that it can happen only with a prior written notice of the tenant.
Step 11 – Rent increase
The landlord should include a section about the rent increase in case the tenant wants them to renew the lease.
Step 12 – Binding effect
The letter should clearly state whether it is binding or not so that parties understand whether or not they should create a more comprehensive agreement in the future.
Step 13 – Governing law
The landlord should mention what law is considered governing for the tenant and landlord. Typically, it is the law of the state where rental space is located.
Step 14 – Acceptance
Explain how the landlord will know that the tenant accepted the terms. Usually, the tenant signs the letter and sends a duplicate copy back to the landlord.
Step 15 – Signatures
Signatures and print names of the parties are the last things to be included in a letter of intent. They make the LOI valid.
You do not need to write the letter of intent to rent commercial property from scratch. Select Create My Document at the top of this page, answer a few questions and get a finished letter you can save or print.
Most problems with a letter of intent come from missing or unclear details. Check your draft against this list before you send it. A few minutes of review saves a lot of back and forth later.
The sample below shows a finished letter written by a tenant, Sidney Lockford, to a landlord, Megan Rox. It uses the same order as the steps above. Replace the names, addresses, dates and amounts with your own details.
To: Megan Rox
Texas Roxy Rentals
995 Whitemarsh Court
Copperas Cove, TX 76522
April 4, 2021
From: Sidney Lockford
8399 Garden Lane
Vidor, TX 77662
RE: Letter of intent to rent commercial property at the address 980 Coffee Drive Corpus Christi, TX 78413
Dear Mrs. Rox,
We are pleased to present the following proposal to lease the above-referenced property on behalf of Sidney Lockford.
Sidney Lockford
Either side can send it first. The template on this page is written from the landlord’s side, and the sample letter shows how a tenant can write to a landlord. A broker or attorney can also prepare the letter for you.
Keep it short. One or two pages are enough for the main terms. Put the small details in the lease agreement that follows.
Keep a signed copy for your records. Then move on to the lease agreement and check that the rent, the term, the dates and the deposit match the letter. A lawyer or broker can help you with that step.
Yes. Select Create My Document at the top of this page, answer a few questions and save or print the finished letter on any device.
General information, not legal or tax advice.
