Deciding to rent space here in Orange County instead of buying is a crucial business decision that affects the future of a business. Before the negotiations for a commercial retail lease begin, there is often a letter of intent from the landlord or property owner. This document outlines the basic terms the landlord expects for the final lease agreement.
Before signing this document, Orange County business owners may want to closely scrutinize this document. Once signed, it may be more of a challenge to make changes in the terms outlined in the letter of intent. If a potential tenant does not agree with one or more of the terms, now would probably be a good time to begin those negotiations.
Another issue that many retail tenants may want to ensure get into the letter of intent is an exclusivity clause. This ensures that the tenant will be the only business of its type in the building or shopping center. For instance, if an individual owns a bakery, an exclusivity clause would mean that it would be the only bakery in the space. If this particular clause is not addressed in the letter of intent, it may not end up in the final lease agreement.
While the commercial lease is the important final product for a retail business, the role of the letter of intent cannot be overlooked. Before executing one, a potential tenant may want to review it thoroughly to make sure it accurately reflects at least the basics of what the final lease will look like. Obviously, having a trained set of eyes to help in the review would be advantageous, so consulting with a commercial real estate attorney may prove invaluable.