When entering into a commercial real estate transaction in the Phoenix Metropolitan area, it is generally recommended to draft a Letter of Intent. Considered as the foundation of a good commercial real estate deal, the Letter of Intent is designed to document the essential terms in an agreement before moving forward with an actual contract. It is considered to be a starting point for the lease or purchase process.
It also can help each party in a transaction clearly understand the terms in simpler, non-legal language and identify unresolved items. Having the terms of an agreement initially outlined in a Letter of Intent can also reassure the seller that the buyer is, indeed, serious about the purchase before investing the time and expense in preparing the actual contract.
There is no single way to draft a Letter of Intent. It can take many forms depending on the criteria agreed upon by both parties. It can be fairly straightforward and non-binding, or filled with specific details, some of which might bind the parties to a few particular items. It is a good idea to make sure that all imperative terms are included so that there are no misunderstandings when the contract is drawn up.
As with any commercial real estate transaction, it is always good to have expert advisors to assist you with a Letter of Intent including your broker/agent and an attorney. Although it’s not as complicated in nature as an actual lease or purchase contract, a Letter of Intent does have a great impact for both parties. At the Menlo Group, our commitment to you, in every stage of the commercial real estate process, is to walk you through each step and give you the benefit of our years of experience. Our goal is to make sure that your best interests are represented.