A preliminary, non-binding agreement outlining the key terms of a prospective lease for business space, such as rent, lease duration, and allowed uses, serves as a roadmap for a formal lease agreement. For example, a prospective tenant might use such an agreement to signal serious interest in a retail space, outlining their intended use as a bookstore and proposing a five-year lease term with a specific monthly rent.
This type of document benefits both landlords and potential tenants. It allows parties to establish mutual understanding before investing significant time and resources in negotiating a full lease. This preliminary step can prevent misunderstandings and streamline the overall leasing process, facilitating smoother transitions and potentially reducing legal costs. Historically, such agreements have become increasingly common as commercial real estate transactions have grown in complexity.