Residential Letter of Intent to Lease

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Residential Letter of Intent to Lease

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Last updated March 2nd, 2023

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A residential letter of intent to lease is a document used by lease applicants to express a formal interest in renting residential property. It’s drafted after the landlord and applicant negotiate rental terms, but before the parties enter into a definitive contract. By signing the letter, the applicant makes it clear that they are ready and willing to make a binding lease agreement with the landlord. The letter summarizes the basic rental conditions, including the lease duration, monthly rent, and security deposit amount.

CONTENTS

Essential Elements of the LOI

There are certain items an LOI must always include to relay the applicant’s intentions while establishing the main terms of the lease agreement. The essential elements of an LOI are:

  • Date & Contact Information – The date on which the letter is written, along with the applicant and landlord’s name, address, and contact information.
  • Intention to Lease – A statement affirming the parties’ intent to sign a residential lease agreement.
  • Property Address – The complete street address of the residential property being leased.
  • Lease Term – The length of the proposed lease agreement. Leases can either be fixed-term (with a definitive end date) or month-to-month.
  • Monthly Rent – The monthly rental amount and the due date for payment.
  • Late Fees – The fees that the landlord can charge if the applicant doesn’t pay rent on time.
  • Security Deposit – The amount the applicant pays to cover potential property damage.
  • Signatures – The signatures and printed names of the applicant and landlord.

Sample

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RESIDENTIAL LETTER OF INTENT TO LEASE

Date: [DATE]

[SENDER (e.g., LEASE APPLICANT) NAME]
[SENDER STREET ADDRESS]
[SENDER CITY, STATE, ZIP]

[RECIPIENT (e.g., LESSOR) NAME]
[RECIPIENT STREET ADDRESS]
[RECIPIENT CITY, STATE, ZIP]

RE: Intent to Lease Residential Property

This Letter of Intent (the “Letter”) sets forth the proposed terms and conditions of an agreement between the Lessor and Lessee (the “Parties”) and shall govern the relationship between the Parties until replaced by a definitive, formal agreement addressing the same transaction and subject matter (the “Definitive Agreement”). The agreement considered in this Letter and in the Definitive Agreement is subject in all respects to the following:

1. THE LESSOR. [LESSOR NAME] (the “Lessor”).

Phone: [LESSOR PHONE] Email Address: [LESSOR EMAIL]

2. THE LESSEE. [LESSEE NAME] (the “Lessee”).

Phone: [LESSEE PHONE] Email Address: [LESSEE EMAIL]

3. ADDRESS OF PREMISES. [PREMISES ADDRESS] (the “Premises”).

4. LEASE TERM. The term of the lease (the “Lease Term”) shall be [WRITE “fixed” OR “month-to-month”]. The Lessee shall be allowed to occupy the Premises starting on [LEASE START DATE] and ending on [LEASE END DATE].

Note: If the lease term is month-to-month, delete the text after “[LEASE START DATE]” above.

5. RENT. The rent to be paid by the Lessee to the Lessor throughout the Lease Term is to be made in monthly installments of $[RENT AMOUNT] (the “Rent”). The Rent shall be due on the [#] day of each month (the “Due Date”).

6. EXPENSES. The Lessee shall be required to pay the following monthly expenses in addition to the Rent: [LIST EXPENSES TO BE PAID BY LESSEE].

7. LATE FEE. If Rent is not paid by the Due Date, the Lessee shall be required to pay the following late fee: [DESCRIBE LATE FEE (IF ANY)].

8. DEPOSIT. The Parties agree that a security deposit [WRITE “will” OR “will not”] be required. If required, a security deposit in the amount of $[DEPOSIT AMOUNT] shall be paid by the Lessee to the Lessor prior to or upon the signing of a lease.

Note: If a security deposit will not be required, delete the sentence beginning with “If required” above.

9. PETS. The Lessee shall have the right to keep [#] pet(s) of the Premises. The following types of pets are allowed: [LIST TYPES OF PETS ALLOWED ON THE PREMISES].

10. FURNITURE AND APPLIANCES. The Lessor shall supply the following furniture and appliances on the Premises for the Lessee’s use: [LIST FURNITURE AND APPLIANCE PROVIDED BY LESSOR].

11. PARKING. The Lessor shall provide [#] parking space(s) to the Lessee. If parking is provided, the Lessee shall be required to pay a fee of $[PARKING FEE AMOUNT] to the Lessor on a monthly basis in addition to the Rent.

Note: If parking will not be provided, delete the sentence beginning with “If parking is provided” above.

12. INTENTION OF THE PARTIES. This Letter sets forth the intentions of the Parties to use reasonable efforts to negotiate, in good faith, a Definitive Agreement with respect to all matters herein. Notwithstanding paragraphs 12 through 14, which shall be legally binding, any legal obligations with respect to all other matters shall only arise if and when the Parties execute and deliver a Definitive Agreement.

13. GOVERNING LAW. This Letter shall be governed under the laws of the State of [STATE NAME].

14. SIGNATURES.

Lessor’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [LESSOR NAME]

Lessee’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [LESSEE NAME]

Why Landlords Use an LOI

Landlords may ask rental applicants to submit a letter of intent before presenting the lease. Some will even refuse certain applicants without first obtaining their signed commitment. Some of the reasons why landlords might use an LOI are:

  • It provides the framework of the lease agreement and relays the terms in an easily digestible manner.
  • It helps advance negotiations by giving both sides a clear understanding of the arrangement.
  • It demonstrates to the landlord that the applicant is a serious renter.
  • With the applicant’s signed commitment, the landlord can spend less time advertising the property to other potential tenants.
  • It could protect either party from legal problems resulting from a future lease violation.

Letter of Intent vs. Lease Agreement

A letter of intent is used during the early stages of a lease negotiation to outline basic terms and conditions for a residential tenancy. It usually doesn’t bind the landlord and applicant to the rental terms, but instead acts as a stepping stone for the parties to reach a formal agreement.

A lease agreement is the definitive rental contract between a landlord and tenant that establishes their rights and responsibilities. Lease agreements are legally binding and enforceable in court.