A Letter of Intent, or LOI, is a preliminary step in the purchase or lease of commercial real estate, signed between a tenant and landlord, or a buyer and seller. It defines the primary economy along with the deal points with proposed terms. This document identifies the most key matters that can be evaluated by all parties to determine if each would like to proceed to an official contract.
Before moving to an official agreement, intent letters work as non-binding arrangements. However, depending on how it is drafted, a letter of intent can be binding and may contain disclaimers if not. Letters of intent can be sent informally by e-mail or formally by official letterhead. Some landlords require this document to be duly signed by all involved parties until forming a mutual agreement to recognize good faith between them. Depending on the number of specifics listed and negotiated, a letter of intent can only be a single page document or up to several pages.
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