The Letter of Intent (LOI) outlines the preliminary understanding between a lessor and lessee for leasing a freehold commercial property to operate a retail outlet. It specifies key commercial and legal terms including rent structure with yearly escalation, a 9-year lease tenure, lock-in period, and interest-free refundable security deposit. The LOI defines responsibilities such as payment of taxes, maintenance, utilities, and infrastructure provisions like electricity and water. It also includes operational aspects like rent-free period, possession timeline, and permitted interior modifications. Dispute resolution is governed through arbitration, with jurisdiction specified, and force majeure clauses provide relief from obligations during unforeseen events. Importantly, the LOI records mutual intent to enter into a binding lease agreement, with final rights and obligations to be detailed in the formal lease deed. Overall, it serves as a foundational document capturing agreed commercial terms while paving the way for execution of a legally binding lease arrangement.
Date—————–
Letter of Intent
This is in furtherance to our meeting and subsequent discussions in regard to granting Freehold property ad-measuring ——– sqft approx. situated on —————————————– on Lease basis for the purpose of Retail outlet under the brand name of “————————”.
Property finalization will be done on the basis of commercials captured in this LOI. The parties shall enter into a binding commitment to pursue this opportunity, such commitment to be finally evidenced by written agreements (final lease deed) reflecting the understanding described in this LOI.
| S.No | Clause / Definitions PROPERTY SPECIFICATIONS/PARTICULARS | |
| 1. | Lessor | 1. —————- |
| 2. | Lessee | ——————————– company Via its authorized signatory |
| 3. | Parties | Lessor and Lessee shall be individually referred as ‘Party’ and jointly referred as ‘Parties’ |
| 4. | Details of the Property | Area- ————- sqft approx. situated on ——————————— |
| 5. | Lease Money / Rent per month | First year INR —————-/- per month Second year INR ————–/- per month Third year INR ————-/- per month |
| 6. | Maintenance | INR NIL Per sq.ft. Will be born by Lessee |
| 7. | Purpose of Lease | Running and Operating Bakery brand by name of “———————-”. |
| 8. | Payment of monthly rentals/ Lease Money | Bank Transfer. |
| 9. | Rent Escalation | 15% after expiry of 3rd Year |
| 10. | Taxes / other property related expenses | Property Taxes / Municipal tax on the property: To be borne by Lessor (present & future) All operation related taxes including GST: To be borne by Lessee / Lessee or any other taxes levied by government |
| 11. | Tenure of Lease | 9 Years from date of execution and registration of Lease Deed. |
| 12. | Lock in Period | Initial 12 Months Excluding 2 months’ Notice Period (From the date of signing of Lease Agreement). During which the Lease Deed shall not be terminable by the Lessee or the Lessor. However, Lessor shall not terminate the lease deed for the entire lease tenure if there is default in rent for two consecutive months. |
| 13. | Infrastructure | Electricity connection shall be facilitated by Lessor with three phase meters. Electricity load shall be provided by Lessor with Sanctioned electricity load for the said premises 25 KW. |
| 14. | Water Supply | Water supply with inlet, outlet will be provided by Lessor. |
| 15. | Interest Free Refundable Security Deposit (IFRSD) | 3 Months |
| 16. | Advance paid | Rent will be payable on or before every 10th day of English calendar month. |
| 17. | Payment terms of security deposit | INR —————-/- via bank transfer no. ………………… dated ……………………… in the ………………………Bank account, A/c No. ……………………………… of ………………………………………… for initial token money to be adjusted further as security deposit at the time of signing of Lease deed. Balance Security Deposit at the time of signing of Lease agreement or handover of the Possession. |
| 18. | Rent Free period | 60 Days Starting from Lease Commencement Date/ Date of Handing over the Possession. |
| 19. | Date of Possession | Effective from the signing of lease. |
| 20. | Representation and Warranties/ | This shall be detailed in definitive agreements both by Lessor and Lessee |
| 21. | Arbitration & Jurisdiction | Parties shall firstly try to amicably resolve the dispute by mutual discussion within failing which only through mutually appointed Arbitrator in accordance with the provisions of Arbitration & Conciliation Act-1996.The courts at Delhi shall have the territorial jurisdiction. |
| 22. | Landlord scope of work | Property to be bare shell by landlord. |
| 23. | Lease Registration | 50-50 percent of total expenses paid by both the parties. |
| 24. | Permissions | Lessor allows Lessee to change in interiors (Hole in walls allowed / alteration of walls also allowed, flooring etc.). |
| 25. | Force Majeure | No Party shall be deemed to be in default if performance of the obligations required by this Lease Agreement is delayed or becomes impossible because of any act of God, war, earthquake, fire, flood, storms, lightening, terrorist attacks, technological or civil commotion or disruption, riots, epidemic, government orders or pandemic. However, in any of the above cases where complex/shop is closed, lessee will not be liable to pay rent till the time complex/shop reopens. (“Force Majeure Events”). IN any of the above cases where complex/shop is closed partially or alternate days by government guidelines rent will be effective according to pro-data basis according to time or days shop is permitted to open by government authorities. |
| 26. | Transaction agency | |
This term sheet records the understanding between the parties. The parties shall endeavor for execution of a lease deed, which shall record rights, duties and obligations of each of the party to govern their inter-se relationship subject to the above property documents. A draft template copy of the main lease deed to be executed shall be provided to the Lessor on signing of this term sheet and the final terms & conditions agreed in this document be incorporated in the Lease Deed.
You shall undertake to keep the conditions of this term sheet confidential.
Thanking you,
For Lessor
……………………………………………………..
For Lessee
M/s ————————-
Mr. …………………………
Witness:
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