Commercial Real Estate Purchase 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

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.

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)

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.