Last Updated February 23, 2024
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What is an Offer to Lease?
An Offer to Lease is a legal document that expresses a prospective tenant’s desire to rent commercial property from a landlord or property manager. It details essential lease terms like duration, deposits, and rent.
An Offer to Lease is an important document that begins the commercial renting process and lays the groundwork for a Commercial Lease Agreement. It’s also known as a lease proposal or an offer to rent letter.
When to use an Offer to Lease
Prospective tenants can use Offer to Lease forms for commercial properties, such as:
- Industrial spaces
- Retail spaces
- Warehouses
- Restaurants
- Offices
LawDepot’s Offer to Lease template also allows for additional spaces like gyms, spas, health clinics, and more.
The importance of using an Offer to Lease
Having a written Offer to Lease is beneficial, as verbal deals are difficult to enforce. Relying only on verbal offers for leasing commercial property is insufficient, as it can lead to misunderstandings and miscommunication.
A written agreement provides clarity and serves as a reference point for any questions that may arise. This could help to resolve potential disputes between the tenant and landlord. In the case of conflicts, an Offer to Lease provides legal protection and can be referenced in court.
Creating a physical contract also elevates the professionalism associated with the agreement, indicating that both parties are serious about their legal obligations.
How does an Offer to Lease work?
Here is a quick overview of securing commercial property, including the role of the Offer to Lease and other required documents
- Application: A prospective tenant submits a Commercial Lease Application to a landlord or property manager to rent a commercial property.
- Selection: The landlord chooses the applicant as a suitable tenant.
- Negotiation: The landlord and tenant discuss lease terms, such as agreeing on rent.
- Offer to Lease: The tenant prepares and signs the Offer to Lease, which outlines the lease’s terms, and presents it to the landlord.
- Acceptance: If the landlord accepts the offer, it becomes a binding agreement between them and the tenant.
- Finalization: Both parties can finalize the tenancy details with a Commercial Lease Agreement.
Sometimes, the landlord may only require a tenant to submit an Offer to Lease instead of a rental application. In this case, some negotiation may come after the tenant sends the Offer to Lease, not before.
What do you include in an Offer to Lease?
For your Offer to Lease to be valid, it must include the following details:
- Tenant and landlord information: List the individual or organization’s name and address.
- Property information: List the property’s address and explain its intended use.
- Lease term: Confirm the start and finish date as well as the move-in date, if applicable.
- Rent: Include the rent amount, the calculation method, payment frequency, and any tax considerations.
- Security deposit: State if the tenant will have to pay a security deposit, its amount, and if the tenant will prepay any rent.
- Expiry date: Provide the official date that the agreement will expire.
You can also state whether the lease is contingent or not upon approval by the tenant’s attorney.
What is the difference between an Offer to Lease and a lease agreement?
An Offer to Lease precedes a Commercial Lease Agreement. It outlines key deal points to guarantee agreement prior to drafting a formal contract. So, if you already have a Commercial Lease Agreement in place, you don’t need an Offer to Lease.
The Commercial Lease Agreement will cover the lease terms in greater detail.
Is an Offer to Lease legally binding?
Yes, when signed by both parties, an Offer to Lease is usually a legally binding contract. Our Offer to Lease template creates an irrevocable offer, but it also asks you to provide a date on which the offer expires. The offer then becomes irrevocable until the expiry date.
The offer becomes null and void if the expiry date passes or the landlord does not accept it. If the landlord accepts the offer before the expiry date, then the offer becomes a binding agreement between the parties.
Our editor tool allows you to modify your contract’s wording if you wish for your Offer to Lease to be a revocable contract instead.
