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Letters of Intent in Real Estate Deals

What a letter of intent does — and the traps that make it accidentally binding.

What is a letter of intent in a real estate deal?

A letter of intent (LOI) is a short document that outlines the main business terms of a proposed deal — price, structure, timeline — before the parties invest in a full contract. It lets both sides confirm they are aligned on the essentials before spending on legal drafting and due diligence.

Is an LOI binding?

Usually the parties intend an LOI to be non-binding as to the deal itself, but that depends entirely on how it is written. Courts have enforced letters of intent — or specific promises inside them, like an exclusivity or good-faith clause — when the language looked like a commitment. A poorly drafted LOI can bind you to something you thought was just a discussion.

How to use one safely

A well-drafted LOI clearly states which parts are binding (often confidentiality and exclusivity) and which are not (the purchase itself, pending a signed purchase and sale agreement). Spelling that out up front prevents an accidental contract.

How Nochumson P.C. helps

Nochumson P.C. drafts and reviews letters of intent for commercial real estate and business deals so the binding lines are exactly where you want them. Contact us before you sign an LOI.

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