Pre-Lease Agreement
A Pre-Lease Agreement is a preliminary contract between a landlord and a prospective tenant that outlines the terms and conditions under which the tenant intends to lease a property before the formal lease is signed. This agreement serves as a framework for the future lease, providing clarity and security for both parties.
Typically, a Pre-Lease Agreement includes important details such as the rental amount, security deposit requirements, the duration of the lease, commencement date, and any contingencies that must be met prior to signing the final lease. It may also stipulate the responsibilities of each party regarding maintenance, utilities, and property management.
For example, if a tenant wants to secure a commercial space for a new business, they might enter into a Pre-Lease Agreement to lock in the rental rate while they complete their due diligence—such as inspections or obtaining financing—before entering into a binding lease. This protects both the landlord and tenant by ensuring that the property is not leased to another party during this period.
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