AGREEMENT TO LEASE is almost redundant since it’s really an agreement to agree to something at a future date.
So the question arises, why would anyone want to use an instrument like this? The answer is because the time to execute a complete Lease Agreement is not quite right.
Here are Five reasons why you may need to initiate an AGREEMENT TO LEASE:
- Perhaps the house or commercial space in question is just being purchased.
- Perhaps an old tenant hasn’t yet moved out.
- Perhaps the new tenant is still bound by a lease somewhere else.
- Perhaps this is a start-up business that is not quite ready to occupy a space.
- Perhaps it is an established business that needs time to get advertising in place to notify customers of the move.
The AGREEMENT TO LEASE takes the pressure off both parties by giving them assurance that the lease is pending, and they will sign it on a specific date.
If you’re a landlord looking for a tenant, you will know that you have someone ready and willing to move into your property when it is ready for occupancy.
You have time to do credit and background checks and know that you’ve got a good tenant.
You can stop advertising and stop worrying that the property will suddenly be vacant, and your rental income will stop.
If you are a prospective tenant looking for just the right housing or the right space for your warehousing, office, or retail business, you’ll relax knowing that you’ve secured the rental you want at a price and terms that you can live with. You won’t find yourself suddenly out in the cold without a place to go.
Yes, people do break promises and agreements. But, when both parties have signed an AGREEMENT TO LEASE, and when the agreement sets forth a sum of money that the defaulting party will have to pay as liquidated damages, there is less danger of default.
Lastly, when the parties write the agreement, neither party has to depend upon memory. The tenant can not come back later and say they thought the rent was $50 a month less, or the landlord thought it was $50 more. Neither party has to rely on their memory to decide which is going to pay the sewer and water bill.
The maintenance agreement is also clearly spelled out. When it is time to draw the actual Lease Agreement negotiation will be minimal because a meeting of the minds has already been established.
This agreement gives peace of mind to both parties, and since all promises are in writing, they are enforceable in a court of law, should the need arise.