In the world of commercial real estate, the difference between a Letter of Intent (LOI) and a Commercial Lease Agreement can mean the difference between informal interest and binding obligation. At Zagury Scott, P.A., we help landlords, tenants, developers, and brokers across Florida navigate these two critical—but very different—documents with confidence and legal clarity.
What Is a Letter of Intent (LOI)?
A Letter of Intent is a preliminary document that outlines the main terms of a potential lease. It typically includes:
- Proposed rent and term
- Security deposit
- Intended use of the space
- Responsibility for buildouts or improvements
- Timeline for execution
Although not always legally binding, certain provisions in an LOI—like confidentiality or exclusivity—can be enforceable. That’s why having a lawyer review it before signing is critical.
What Is a Commercial Lease?
A commercial lease is a legally binding contract between a landlord and a tenant. It sets forth the rights, obligations, and liabilities of both parties in detail. This document governs:
- Rent payment terms and escalation clauses
- Maintenance and repair responsibilities
- Insurance requirements
- Dispute resolution mechanisms
- Early termination or default conditions
It’s the final step in the negotiation process, often based on the framework set by the LOI.
Key Differences at a Glance
| Feature | Letter of Intent (LOI) | Commercial Lease |
|---|---|---|
| Legal binding? | Usually not, partially binding | Fully binding once signed |
| Level of detail | High-level summary | Comprehensive, detailed contract |
| Flexibility | High | Limited once executed |
| Purpose | Set intent and basic terms | Formalize the legal relationship |
Why Does It Matter?
Mistaking an LOI for a full agreement can lead to disputes, missed opportunities, or unexpected legal consequences. For landlords and tenants alike, the transition from LOI to lease should be managed carefully, with a legal team ensuring that terms are clear, fair, and enforceable.
Need Help With Your Lease or LOI?
Whether you’re negotiating your first commercial lease or reviewing an LOI for a multimillion-dollar space, Zagury Scott, P.A. is here to protect your interests. Our experienced real estate attorneys provide personalized legal support for Florida’s fast-moving commercial market.
📞 Contact us today to schedule a consultation and make sure you’re protected at every stage of your deal.
