Due Diligence: The process of verifying facts about the other parties and the subject property in a commercial lease transaction. This will often include reviewing all financial records and other material information pertaining to the property, consequently allowing the reviewing party to assess the strengths and weaknesses of the other party and any risks involved. Essentially, due diligence refers to the level of care and procedures that should be exercised by a reasonable person before entering into an agreement or financial transaction with another party.
Letter of Intent (“LOI”): A non-binding term sheet which outlines the basic terms of a lease transaction between a tenant and a landlord. Although non-binding, the LOI sets the playing field for the preparation and subsequent negotiation of a lease.