AI for real estate lawyers: faster lease and purchase agreement review in Word

Real estate practice runs on long documents that repeat the same issues: commercial leases, purchase and sale agreements, guaranties, SNDAs and estoppels. Most of the work is spotting what is missing or one-sided and marking it up quickly. That is where an AI assistant inside Word saves the most time, provided you stay the one who decides.

Where AI helps in a real estate practice

• First-pass lease review. Flag missing standard terms and one-sided clauses before you read line by line.
• Consistent markups. Propose word-level redlines as tracked changes, so the other side sees a normal Word turn.
• Clean defined terms. Leases and PSAs lean on defined terms ("Premises", "Operating Expenses", "Due Diligence Period"). A rule-based check finds terms used without a definition and cross-references that point nowhere.
• First drafts. Describe the deal in plain English and get a lease draft into Word that you then edit.

Commercial lease: what to check

• Rent and escalations. Base rent, fixed bumps or CPI, free rent and when it can be clawed back.
• Operating expenses and CAM. The definition, exclusions (capital items, landlord financing, leasing costs), caps on controllable expenses, gross-up, and the tenant's audit right.
• Assignment and subletting. The consent standard ("not to be unreasonably withheld"), permitted transfers to affiliates or on a sale of the business, and recapture rights.
• Use, exclusives and co-tenancy for retail.
• Repairs and HVAC. Who repairs and replaces structural elements, roof and building systems.
• Insurance, indemnity and waiver of subrogation. Make sure the waiver matches the insurance each side carries.
• Casualty and condemnation. Restoration periods, rent abatement and termination rights.
• SNDA and estoppel. The tenant's protection if the lender forecloses, and what the tenant has to certify.
• Default, cure periods, holdover and guaranty. Holdover rent percentage, and whether a guaranty is capped or burns off.

Purchase and sale agreement: what to check

• Due diligence period, extensions, and when the earnest money goes hard.
• Title and survey objection deadlines and the seller's cure obligations.
• Seller representations, survival period and any cap on post-closing claims.
• Closing conditions, prorations and who pays transfer taxes.
• Risk of loss before closing. Some states set a default rule by statute, for example New York General Obligations Law 5-1311, which leaves the risk on the seller until title or possession transfers unless the contract says otherwise.
• A 1031 exchange cooperation clause, if either side may need one.

State rules that change the answer

Real estate is state law. Examples that often matter:

• Mitigation. Texas Property Code 91.006 makes a landlord mitigate damages when a tenant abandons, and a lease cannot waive that duty. New York requires mitigation for residential leases (Real Property Law 227-e) but not, as a general rule, for commercial leases.
• Residential security deposits. Caps and return deadlines vary. California Civil Code 1950.5 has generally limited deposits to one month's rent since July 2024, with an exception for some small landlords.
• Governing law and venue. Courts will usually apply the law of the state where the property is, whatever the contract says about other matters.

Select the property's state in LexDraft before you review, so state-specific red flags are checked against the right jurisdiction.

A workflow in Word with LexDraft

1. Open the lease or PSA in Word and open LexDraft in the side panel.
2. Select the state and run the review. Findings come back graded Critical, High, Medium or Low, with missing standard terms flagged.
3. Run the defined-term and cross-reference checks. They are rule-based and finish almost instantly.
4. Accept the redlines you agree with; they appear as native Word tracked changes. Reject the rest and add your own.
5. Use the LexDraft chat to get a plain-English explanation of a clause for the client email, then check it.

For a clause-by-clause checklist, see how to review a lease agreement in Word.

What LexDraft does not do

LexDraft does not search title, read surveys or check zoning. It does not know the deal's business terms unless you tell it. AI review can miss issues or be wrong, so read the marked-up document yourself before it goes out.

Using AI ethically in this practice

ABA Formal Opinion 512 (July 2024) and many state bars say the same four things: understand the tool, protect client confidences, check every output, and bill fairly for AI-assisted work. Our state-by-state guide to AI ethics for solo lawyers summarises the guidance in 20 states and D.C.

Plans

Start on the Free plan: 5,000 generated words a month, no time limit and no credit card. Professional is $99 a month or $990 a year for 100,000 words a month. Business is $199 a month or $1,990 a year with unlimited words. LexDraft runs in Word 365 (Windows and Mac), Word 2021 and Word on the web, and it does not use customer documents to train models.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.