LOI vs. lease: a checklist for finding terms that changed

An LOI-to-lease review checks whether the business terms in a letter of intent appear accurately in the lease draft. Record each term as matches, differs, not stated, or unclear, with a quotation and location from both documents. A missing term needs a question; it does not establish that the other party rejected it.

This is a comparison workflow, not a conclusion about whether an LOI is legally binding. Ask counsel which provisions create obligations and how the proposed lease affects them.

Start with the actual negotiated baseline

Collect the latest agreed LOI, any written changes to the business terms, the current lease, and every work letter, guaranty, and exhibit. Write the document dates at the top of the review. If two people are using different LOIs, resolve that before comparing numbers.

An email proposing a larger allowance is not the same as a confirmed revision. Keep proposed terms separate from the agreed baseline, and identify who can confirm agreement. Otherwise the comparison can be numerically accurate and still describe the wrong deal.

Compare these business terms first

• Premises: suite, area, measurement basis, parking, and storage.
• Rent: amount, annual or monthly units, escalation dates, and any free-rent period.
• Timing: delivery condition, possession, rent commencement, and term length.
• Construction: allowance amount, eligible costs, payment conditions, and deadlines.
• Operating costs: expense structure, caps, exclusions, and allocation basis.
• Flexibility: renewal terms, transfer provisions, and negotiated termination rights.
• Security: deposit, guarantor, stated limits, and release conditions.

A matching number is only the first check. Five free months starting at possession can produce a different cash schedule from five free months starting after construction. Read the trigger as well as the duration.

Worked example: a smaller allowance

Illustrative facts: an LOI states a $40 per square foot improvement allowance for 3,000 square feet. The work letter states $32 per square foot for the same area. The LOI amount is $120,000; the draft amount is $96,000. The difference is $24,000.

Record the arithmetic and quote both provisions. The question is: “Was the allowance intentionally revised from $40 to $32 per square foot?” Do not call the difference a recovered saving or an established landlord obligation. First confirm the correct baseline, eligible area, and any later agreement.

If the work letter instead says “allowance to be agreed,” the status is unclear, not a $120,000 shortfall. If no allowance appears after reviewing all supplied exhibits, record not stated and list which documents were checked.

Copy this discrepancy record

• Term and baseline: TI allowance; LOI paragraph 7, dated [date].
• LOI quotation: [exact wording].
• Lease quotation and location: [exact wording, section, exhibit, version].
• Status: matches / differs / not stated / unclear.
• Effect: [calculation and assumptions, or unknown].
• Question and owner: [specific clarification; person responsible].
• Resolution evidence: [written response and location in the next draft].

Download the LOI comparison worksheet and use the open-items log workflow to carry unanswered questions forward.

When is a discrepancy closed?

Close an item only after the agreed resolution appears in the identified draft or the responsible reviewers document another disposition. An answer in a cover email is useful evidence, but the signing document still needs a check.

CRE Redline's worked clause example shows its comparison approach. Use the product to organize evidence, then confirm the business decision and legal language with the people responsible for the deal. For the earlier drafting stage, see how to write a commercial lease LOI.