casemark/commercial-real-estate-loi

Commercial Real Estate Purchase LOI

Proposes deal terms and a negotiation framework for commercial property acquisition while limiting binding effect to specified provisions only.

Gather Before Drafting

1. Parties — legal names, entity types, authority, notice addresses.
2. Property — street address, county/state, APN(s), included/excluded assets.
3. Economics — price, consideration type, deposit amount and timing, financing posture.
4. Timeline — due-diligence period, PSA target, closing target.
5. Binding scope — confidentiality terms, exclusivity window, expense allocation, governing law.

Document Structure

Header & Intro

• Date, seller name/address, subject line: "Letter of Intent – [Property Address/Name]".
• Identify buyer, seller, property, and intended transaction.
• State non-binding nature except specified sections.

Core Terms

| Term | Instruction | Placeholder | |---|---|---| | Buyer | Full legal name; allow assignment to affiliate/SPE if intended | [Buyer Legal Name] | | Seller | Full legal name; confirm record title holder(s) | [Seller Legal Name] | | Property | Address, county, state, APN(s), improvements, fixtures | [Property Description] | | Purchase Price | Fixed or adjustable; state adjustment method | [Price] | | Consideration | Cash, debt assumption, seller financing, or mix | [Consideration] | | Earnest Money | Amount, timing after PSA, escrow holder, refundability triggers | [Deposit Terms] | | Due Diligence | Days from PSA; scope; buyer discretion; termination right | [DD Period/Scope] | | Financing | Contingent or cash; proof of funds/commitment | [Financing Terms] | | Closing | Target date or days after contingencies; extensions | [Closing Date] | | Closing Costs | Allocation of title, escrow, taxes, surveys, fees | [Cost Allocation] |

Due-Diligence Scope Checklist

• Physical inspections and access rules
• Environmental review and reports
• Title commitment, exceptions, survey
• Leases, rent roll, tenant files, estoppels
• Operating statements and expense history
• Zoning, permitted use, compliance records
• Service contracts and vendor agreements

Binding Provisions Block

Create a discrete section titled "Binding Provisions" expressly stating these terms bind while all others do not.

| Item | Required Elements | |---|---| | Confidentiality | Scope, permitted disclosures, duration, exclusions, remedies | | Exclusivity | Start, duration, prohibited activities, breach consequences | | Expenses | Each side bears own costs (or seller reimburses on breach) | | Governing Law | State law and venue for binding provisions only |

Acceptance Block

• Acceptance deadline (date/time, delivery method).
• Buyer signature block (name/title/date).
• Seller block labeled "Agreed and Accepted" (name/title/date).

Optional Clauses (include only if provided)

| Clause | When | |---|---| | Tenant Estoppels / SNDA | Multi-tenant or credit-sensitive deals | | PSA Milestones | Staged diligence or deposit increases | | Risk Allocation | Casualty/condemnation between LOI and closing | | Broker Commission | Broker involved or allocation disputes anticipated |

Pitfalls & Checks

• Restate non-binding status both in the intro and immediately before signature blocks.
• Isolate binding sections; add a severability sentence for those sections only.
• Avoid "agreement to agree" language unless expressly intended.
• Do not include good-faith negotiation obligations unless the client accepts that exposure.
• Use specific dates and dollar amounts; bracket unknowns with [placeholder].
• Verify compliance with local transfer-tax and escrow customs.
• If seller is not the record owner, require evidence of authority to sell.