Key Takeaways
- Florida business law protects companies from unfair competition, contract breaches, and partner disputes.
- Acting early saves time, money, and business relationships.
- An experienced business attorney helps you assess risk and choose the right legal strategy.
A commercial lease letter of intent (LOI) in Florida is a short document that records the business terms you and a landlord have agreed on before anyone drafts the lease. It is usually non-binding, but it sets the starting point for every later negotiation. Get the rent, term, build-out and exit terms right in the LOI, because the lease will follow it, and the details you leave out tend to be settled in the landlord’s favor.
This guide is for Florida business owners about to sign an LOI or receive one. It covers what the LOI should say, which parts can bind you, and how it connects to the lease and to Florida’s thin statutory protections for commercial tenants.
TL;DR
- An LOI is typically a short-form document of about 2 to 5 pages that outlines the business terms of a proposed lease. Neither side is obligated to complete the lease just because it was signed.
- A Florida LOI should state that it is non-binding except for chosen provisions such as confidentiality, exclusivity and governing law.
- Florida commercial tenants have far fewer statutory protections than residential tenants, so the lease, and the LOI that shapes it, carries the weight.
- Florida no longer charges sales tax on commercial rent for occupancy periods beginning on or after October 1, 2025, so your LOI should not budget for it.
- Have a business attorney read the LOI before you sign it, not only the lease afterward.
Table of Contents
- What a commercial lease LOI does
- Which parts of a Florida LOI can be binding
- What to put in the LOI
- Why Florida’s legal backdrop makes the LOI matter
- From LOI to lease: how the process runs
- Common LOI mistakes small businesses make
- Perspective: the LOI is where we do our best work for tenants
- Get the LOI reviewed before you sign
- FAQ
- Sources
What a commercial lease LOI does
Think of the LOI as the term sheet for your space. It captures the economics and key conditions: who the parties are, the premises, the rent, the length of the term, the security deposit, the allowance for improvements, and the timeline to a signed lease. It lets both sides find out early whether the deal is realistic, before either pays lawyers to draft and mark up a full lease.
It is typically non-binding. As one Florida brokerage explains, signing an LOI does not by itself obligate either party to complete the lease. That is helpful, but it creates a false sense of safety. The same source points out that once an LOI is signed, formal lease negotiation almost always uses the LOI terms as the starting point, and anything the LOI does not address is typically resolved in the landlord’s favor because the tenant’s attorney ends up reviewing language rather than reopening the economics.
In practice, that means the LOI is where you have the most leverage. After you sign, you are negotiating around the edges.
Which parts of a Florida LOI can be binding
A well-drafted LOI says plainly that it is not a contract to lease, then carves out a few provisions that do bind. Guidance for Florida LOIs recommends the document explicitly state it is non-binding except for specific provisions, such as confidentiality, exclusivity (a no-shop period) and governing law. The point of the express language is to keep the whole document from being treated as a binding agreement.
Here is how those provisions usually work for a tenant:
| Provision | Usually binding? | What to check |
|---|---|---|
| Business terms (rent, term, allowance) | No | Whether the wording sounds like a commitment rather than a proposal |
| Confidentiality | Yes, if stated | Who is covered, and for how long |
| Exclusivity / no-shop period | Yes, if stated | Length of the period, and whether it binds the landlord only or you too |
| Governing law and venue | Yes, if stated | Florida law and a county that is practical for you |
| Deposits or fees paid with the LOI | Depends on the wording | Whether it is refundable if the lease is not signed |
The risk is in the drafting. Language such as “the parties agree” or “tenant shall” in the business terms, with no clear non-binding statement, invites a dispute over whether a deal was made. If a landlord takes the space off the market during a no-shop period and you walk away, you want to know exactly what you promised.
What to put in the LOI
The LOI should be short, but it should not be vague. These are the terms we would want pinned down before a small business signs.
Parties and premises
Name the actual tenant entity, not you personally, and identify the premises by address, suite and approximate square footage. If you have not formed the entity yet, do that first. Signing a lease personally when you meant to sign through a company is a common and avoidable exposure. Our business formation work often starts exactly there.
Rent, escalations and additional charges
State base rent, how it increases each year, and which operating costs you pay on top of it. Ask how those costs are calculated and what is included. Because Florida law leaves most of the commercial relationship to the contract, the LOI is the right place to discourage open-ended pass-throughs.
On taxes, Florida repealed the state sales tax on commercial rent. House Bill 7031 permanently eliminates the tax effective October 1, 2025, after the rate had been cut from 6% to 2% in June 2024. The Florida Department of Revenue says sales tax and any discretionary surtax still apply to rent for occupancy periods through September 2025, and also to short-term transient rentals of six months or less and to parking or storage of vehicles, boats and aircraft. Property taxes passed through to you under the lease are a separate matter, so make sure the LOI says how they are shared.
Term, renewal and expansion
Set the initial term, renewal options and the way renewal rent is set. A broker-side tip worth following: do not size the lease only to your current operations. Tenant advisors describe it as a common due diligence failure and recommend stress-testing the lease against growth, contraction or exit scenarios. Ask now for a right to expand, a right of first offer on neighboring space, or an assignment and sublease right.
Florida does not cap commercial lease length by statute, and a lease for a year or more must be in writing and signed by the party to be bound. Oral arrangements for shorter periods may be enforceable in theory, but they leave you with no documented terms, so a written lease is the only sensible route for a business.
Build-out, delivery and opening
If the space needs work, say who does it, who pays, what allowance the landlord provides, and when rent starts. Tie the rent commencement date to delivery of the premises in the condition promised, and to permits, not to the date you sign. A restaurant waiting on a county permit should not be paying full rent while the landlord’s contractor is behind.
Use, exclusivity and signage
Define your permitted use broadly enough to cover how the business may evolve. If competing tenants in the same center would hurt you, ask for an exclusive use clause. Address signage and parking too, since they are hard to add after the lease exists.
Security deposit and guaranty
State the deposit and whether a personal guaranty is required. A guaranty can follow you after the business closes, so ask for a cap, a burn-off after a number of on-time years, or a limit to a set number of months of rent. If you are thinking about an eventual wind-down, our guide to what to consider before selling or winding down a Florida business explains why this matters.
Timeline and next steps
Set a date by which the landlord delivers a first lease draft and a date by which the exclusivity period ends. Without these, a no-shop period can leave you waiting while your options elsewhere cool off.
Why Florida’s legal backdrop makes the LOI matter
Residential tenants in Florida get a package of statutory protections. Commercial tenants largely do not. Courts treat Part I of Chapter 83 as the law covering nonresidential tenancies, and that same opinion notes Part I has no provision for the prevailing party to recover attorney’s fees, unlike Part II. So fee-shifting is something the lease has to provide if you want it.
Other gaps are practical ones. A Florida practice guide notes that there is no statutory 24-hour entry notice for commercial tenancies, and no statutory emergency-entry provision either: the lease governs access, notice and remedies. The same guide says commercial tenancies lack the statutory harassment penalty found in residential law, so remedies for something like a lockout come from the lease. As a result, Florida law relies almost entirely on lease terms in commercial tenancies, which makes careful drafting and negotiation essential.
For your LOI, this means the items below should be agreed in principle early, not left to the form lease:
- Landlord entry rights and notice.
- Who pays attorney’s fees in a dispute.
- Default and cure periods, and what counts as a default.
- Landlord’s remedies, including whether it must try to re-let the space.
- Protection if the landlord sells or the lender forecloses.
- Early termination, assignment and sublease rights.
On the fifth point, a lease can be recorded in a short form in county records to protect a tenant’s position, and we discuss that during lease negotiations. If you are already in a lease and want out, see our guide on how to get out of a commercial lease early in Florida.
From LOI to lease: how the process runs
- Search and shortlist. Tour several spaces so you have alternatives. Leverage comes from having options.
- Receive or send the LOI. Landlords often send their own form. You can mark it up or send yours first.
- Negotiate the business terms. This is where rent, term and allowance get settled.
- Attorney review before signing. Check the binding clauses and the wording of every business term.
- Sign the LOI and honor any exclusivity period.
- Lease drafting and negotiation. The landlord’s attorney drafts, and your attorney checks it against the LOI.
- Execution and move-in. Confirm delivery condition, insurance certificates and commencement date in writing.
At step 6, your attorney’s job is to hold the landlord to the LOI and flag anything new. Our commercial lease review checklist lists the provisions we check in that draft.
Common LOI mistakes small businesses make
- Treating it as paperwork. The LOI frames the lease. Weak terms here are hard to recover later.
- Signing with unclear binding language. If the document does not say what is non-binding, a landlord may argue otherwise.
- Agreeing to a long exclusivity period without a deadline for the lease draft. You are locked in, and the landlord is not pressed.
- Leaving out growth and exit rights. Assignment, sublease and early termination are easier to win before the lease form takes over.
- Forgetting the personal guaranty. It often appears for the first time in the lease. Raise it in the LOI.
- Skipping renewal mechanics. Renewal rent that is “to be determined” leaves the landlord holding the pen.
If you are renewing rather than leasing new space, many of the same lessons apply. See our pieces on 12 commercial lease issues Florida tenants must fix before renewing and legal traps in lease renewals.
Perspective: the LOI is where we do our best work for tenants
We see small business owners treat the LOI as a friendly formality, then spend months fighting over the lease. By then the economics are set and the landlord’s counsel is just filling in the blanks.
Our approach is to get involved while the deal is still a few pages long. We read the LOI for what it promises, what it silently leaves out, and which clauses could bind you. We then propose the changes that matter to your operations: rent escalations, build-out timing, guaranty limits, renewal and exit rights. Our firm has more than 20 years of experience in business transactions and disputes, and we have seen how lease problems turn into litigation. Preventing that is far cheaper than winning it.
The clients who do best are the ones who call before they sign anything, even a one-page letter.
Matthew
Get the LOI reviewed before you sign
We represent small businesses, startups and entrepreneurs across South Florida on leases and other business transactions. We can review or draft your LOI, negotiate with the landlord’s side, and then carry the deal through to a lease. If a lease dispute comes up later, we handle that too. Fees depend on the scope of the matter, and we will discuss how your matter would be billed when we speak.
To discuss a lease or LOI, start with our real estate transactions and litigation page or our business transactions practice, and contact the firm. For a Broward-based review, see our page on commercial lease review in Fort Lauderdale.
FAQ
Is a commercial lease LOI legally binding in Florida?
Usually not as to the business terms, but it can be binding in parts. Florida LOIs are commonly drafted to be non-binding except for named provisions, such as confidentiality, exclusivity and governing law. Read the binding clauses closely and have an attorney confirm the document says what you intend.
How long should a commercial lease LOI be?
Typically it runs about 2 to 5 pages. It should cover the parties, premises, rent, term, improvements, deposit, and the timeline, without trying to be the lease itself.
Do I owe sales tax on commercial rent in Florida?
Not for rental or occupancy periods beginning on or after October 1, 2025, since the state repealed the tax. Some items, such as short-term transient rentals and vehicle, boat or aircraft storage, are still taxable. Ask your accountant how your own rent is treated.
Does a commercial lease have to be in writing?
A lease for one year or longer must be in writing and signed by the party to be bound. For any business tenancy, a written lease is the way to protect your rights.
Should a lawyer review the LOI or only the lease?
Both. The LOI sets the starting point for the lease, so the best time to change a term is before you sign it. Our attorney can review it quickly so you do not lose the space.
Sources
- Letter of Intent (LOI) in Commercial Real Estate
- Commercial Lease Letter of Intent (Single-Tenant), Florida
- How Commercial Leases Differ From Residential
- Florida Senate: tax savings package, including the commercial rent tax repeal
- Florida Department of Revenue: Sales Tax on Commercial Rentals Repealed
- 10 Essential Due Diligence Steps for Commercial Tenants
- Florida Commercial Lease Requirements
- Third District Court of Appeal opinion on Chapter 83, Part I
- Real Estate Litigation 2026: Florida
