What Is an Offer to Lease?

An offer to lease is a legal statement from an entity interested in leasing a property sent to the owner or manager to express formal interest. The document can open negotiations between the interested party and the owner to determine if it is possible to reach an agreement on the terms of a lease. Offers to lease are most common with significant commercial real estate or facilities like schools. They can be drawn up by an attorney, and it is also possible to use generic paperwork.

In the offer to lease, the interested party will describe the property and discuss terms. The document may outline the need for improvements, discuss how much the entity is willing to pay, and stipulate the length of lease desired. All of these terms can be negotiable. The document can also outline some circumstances in which it would rescind the offer; for example, if a building is not safe for earthquakes and this is uncovered during the lease negotiations, the offering party can rescind the offer without penalty.

Owners can review an offer to lease to determine if they like the offer. They may consider factors like the types of terms offered, and the willingness to negotiate. The owner can come back with a counteroffer, or may agree to accept the terms as is. If the two parties can agree, the owner will draw up a lease agreement and all parties will sign it to enter a formal contract. The lease agreement will spell out the agreed-upon terms, and both parties should review it carefully to make sure everything they negotiated is present.

Individuals looking for homes can also submit an offer to lease to a landlord, although this can be more unusual. As with commercial property, the offer must include some basic information about proposed uses and should discuss terms like the monthly rent, willingness to perform improvements, and so forth. Renters may submit an offer to lease if they want to compete for available properties or to express interest in a property so the owner knows to call them if it becomes available in the future.

One advantage of offers to lease for property owners is that they can create competition. Instead of taking applications and reviewing them, the landlord can gauge interest by accepting offers to lease. The landlord may be able to get more money for the property, or negotiate a more favorable deal, by seeing what kinds of terms prospective tenants bring to the table.