4 Tips for Drafting Letters of Intent to Purchase or Lease Real Estate
Are you planning to purchase or lease commercial real estate? Negotiating a letter of intent (also known as an LOI) will be one of the first and most important steps you take on the way to owning or leasing your new property. To help you through that process, here are four quick tips on LOIs.
Make Sure Your Letter of Intent is Non-Binding.If you're not careful, that letter of intent you wrote in a hurry at midnight could become your purchase and sale agreement. To make sure that does not happen, always add language to your LOI that makes it clear that your letter of intent is non-binding.
Keep Your Letter of Intent Simple.Don't use your LOI to work out every term of your deal. Instead, use your letter of intent to outline basic business terms, such as the price, the amount of earnest money and the closing date.
Include an Acceptance Deadline.Avoid the trap of sending a signed LOI, then waiting and wondering if the seller or landlord will ever get back to you. Pick a reasonable deadline for the seller or landlord to accept your LOI and put it in your Letter of Intent.
State, in Your LOI, that Your Attorney Will Draft the Lease or Purchase Agreement.It is a big advantage to be the party who writes the agreement, rather than the party who reviews an opponent's agreement. Secure the advantage of drafting the contract by stating, in the LOI, that, promptly after execution of the LOI by all parties, your attorney will prepare the lease or purchase agreement