The Letter of Intent in Commercial Real Estate: What to Include Before the Lease or Contract

Why the Letter of Intent Matters More Than Most Buyers and Tenants Realize

In commercial real estate, the formal lease or purchase contract is rarely where a deal is actually made. It is where the deal is documented. The real negotiation happens earlier, in the letter of intent (LOI), and what you agree to at that stage shapes every clause that follows. In a market like Daytona Beach and Volusia County, where average commercial list prices have climbed to over $1 million and retail vacancy sits below 3.5 percent countywide, the stakes on every transaction are genuinely high. Getting the LOI right is not optional.

This article explains what a well-structured LOI should include, what it typically does not bind you to, and why having an attorney review it before you sign anything is worth far more than the cost of the hour.

What a Letter of Intent Actually Is (and Is Not)

A letter of intent is a preliminary written document that outlines the key business and legal terms that the parties intend to include in a future lease or purchase contract. It is generally non-binding on the substantive deal terms, but that word "generally" carries real weight. Certain provisions inside an LOI, such as confidentiality clauses, exclusivity or no-shop periods, and deposit terms, can absolutely be drafted as binding and enforceable under Florida law.

Florida courts have held that an LOI may create enforceable obligations when the language clearly expresses the parties' intent to be bound to specific terms. If your LOI includes language like "the parties agree" or "Tenant shall pay" rather than "the parties propose" or "it is anticipated that," you may have crossed from preliminary negotiation into binding commitment without realizing it. For a deeper look at how these terms carry forward into the final document, see our complete checklist of what should be included in a commercial lease agreement in Florida.

The Core Terms Every Commercial LOI Should Address

Whether you are a tenant negotiating retail space in Port Orange, a buyer pursuing an industrial parcel in DeLand, or an investor targeting a mixed-use building near Ormond Beach, your LOI should clearly address all of the following:

• Identification of the parties: Full legal names of landlord and tenant, or buyer and seller. If an entity is involved, name it precisely and confirm its formation status in Florida.
• Property description: The street address and a legal or suite-level description of the premises, including the rentable square footage and any exclusive use areas such as parking, storage, or signage locations.
• Proposed rent or purchase price: For leases, state the base rent, the rent structure (gross, net, or triple-net), and any proposed rent escalations. For acquisitions, state the offered price and the basis for it. If you are unsure how rent structures differ, review our article on gross lease vs. net lease vs. triple-net: which one are you actually signing.
• Lease term or closing timeline: The proposed commencement date, lease duration, and any renewal or extension options. For a purchase, include a target closing date and any conditions that must be met first.
• Tenant improvement allowance or seller concessions: If the landlord is expected to fund buildout or the seller is expected to make repairs, document those expectations now, not after attorneys have drafted a 40-page lease.
• Due diligence and inspection period: Specify how long the buyer or tenant has to inspect the property, review financials, and conduct environmental or zoning review before committing fully.
• Deposit or earnest money: State the amount, who holds it, and the conditions under which it is refundable. Under Florida Statute 475.25, real estate brokers handling escrow funds must comply with specific trust account rules, and escrow disputes are governed by Florida Statute 475.42.
• Exclusivity or no-shop provision: If you want the landlord or seller to stop marketing the property while you complete due diligence, say so explicitly and label this clause as binding.
• Contingencies: Financing contingencies, lease co-tenancy requirements, zoning approvals, and permitting conditions should all appear here in outline form.
• Personal guarantee expectations: If a landlord will require a personal guarantee, the LOI should acknowledge it. Surprises on this point kill more deals than almost anything else. Our article on personal guarantees on commercial leases in Florida explains the exposure in detail.
• CAM and operating expense responsibilities: At minimum, identify who bears operating costs and how they are calculated. Even a one-sentence acknowledgment prevents major disputes at lease drafting.
• Binding vs. non-binding designation: The LOI should contain an explicit statement identifying which provisions are binding and which are not. This is not boilerplate. It is essential.

Common Mistakes That Create Real Legal Exposure

The most frequent mistake in commercial LOIs is ambiguity. Parties treat the LOI as a handshake summary and assume the lawyers will sort it out later. But when the lawyers sort it out later, each side remembers the conversation differently, and the LOI becomes the only written record of what was agreed. Courts in Florida will look to the LOI language to resolve those disputes.

A second common mistake is failing to address zoning and permitted use. In Volusia County, commercial zoning classifications under the County Land Development Code govern what activities a tenant may legally conduct on a given parcel. A lease that closes without confirming permitted use compatibility can result in a tenant who cannot legally operate the business they signed a lease to run. For properties in New Smyrna Beach, Palm Coast, or DeLand, zoning verification should happen during the LOI phase, not after execution.

A third mistake is omitting document stamp tax and closing cost allocations in purchase transactions. Florida's documentary stamp tax on deeds is imposed at $0.70 per $100 of consideration under Florida Statute 201.02, and on notes or mortgages at $0.35 per $100 under Florida Statute 201.08. Who pays what should be addressed at the LOI stage so there are no surprises at closing.

Why Volusia County's Active Market Raises the Stakes

With projected job growth of 43.3 percent for the greater Daytona Beach area, significantly above the national average, and major retail entrants like Trader Joe's and Sprouts Farmers Market choosing Volusia County for expansion, competition for quality commercial space is intensifying. In that environment, parties move fast. Fast movement without legal structure is where costly mistakes happen. An LOI drafted carefully by an attorney who is also a licensed broker gives you both the legal protection and the transactional fluency to move efficiently without overexposing yourself.

Work With an Attorney-Broker From the Start

Arthur Simpson, Esq., CIPS is a Florida-licensed attorney, certified international property specialist, and the broker of Realty Pros Assured, serving Daytona Beach, Port Orange, Ormond Beach, New Smyrna Beach, Palm Coast, DeLand, and the greater Volusia County area. When you work with Arthur, the legal review and the brokerage representation are not two separate conversations. They are the same one, from the LOI forward.

If you are preparing to sign or send a letter of intent on a commercial lease or purchase, contact Arthur Simpson before you put pen to paper. Visit arthursimpson.com or call to schedule a consultation. The right LOI does not just start a deal. It protects it.

Arthur Simpson, Esq., CIPS | Broker, Realty Pros Assured | Truestead Law, LLC | Daytona Beach, Florida | September 12, 2026