OTL stands for Offer to Lease.
It is common when a landlord and tenant are negotiating the terms of the lease for certain premises that they enter into a relatively short agreement which is often referred to as an Offer to Lease. An Offer to Lease generally sets out the key business terms and some of the legal terms of the lease arrangement.
The Offer to Lease will often state that the landlord will have a formal comprehensive Lease agreement drawn up within a short period of time after the signing of the Offer to Lease and that the tenant will be required to sign the landlord’s standard lease agreement, without amendment. It is very critical that a tenant ensure that this provision is amended so that the tenant and its counsel have the right to negotiate amendments to the Lease which are satisfactory to both the landlord and the tenant.
(The UK version of an OTL is an HOTS or heads of terms).
If the tenant and landlord, represented sometimes by the property manager, agree on the OTL terms, the next step is the signature of the lease agreement.
The sales agreement counterpart of an OTL is an OTP – an acronym for the offer to purchase.
Incidentally, in the UK, a HOTS is used for either a lease or a sales transaction.
