lev-os Letter of Intent — Commercial Real Estate Purchase
Drafts a non-binding LOI for commercial real estate acquisition with enforceable confidentiality and exclusivity provisions. Targets U.S. transactions; state-specific items flagged with [Confirm per local custom].
Prerequisites
Gather before drafting:
- Parties — full legal names, entity types, addresses (buyer and seller)
- Property — street address, APN, property type, included/excluded items
- Deal terms — purchase price, deposit amount, financing structure, target closing date
- Timelines — exclusivity period, due diligence duration, acceptance deadline
- Brokerage — commission structure and responsible parties
Document Sections
| Section | Content |
|---|---|
| Header | Date, seller name/address, subject line ("Letter of Intent" + property address) |
| Introduction | LOI purpose, both parties with legal designations, property type |
| Buyer/Seller ID | Full legal names, entity types; buyer assignment rights to affiliates/designees |
| Property Description | Address, city, county, state, APN; land, improvements, fixtures, appurtenances; exclusions |
| Purchase Price | Dollar amount; adjustment methodology; consideration form (cash/debt/seller financing) |
| Earnest Money | Amount, escrow holder, deposit deadline (business days post-PSA); refundability; crediting at close |
| Due Diligence | Duration (days post-PSA); scope checklist; termination right with deposit refund; buyer's sole discretion |
| Financing Contingency | Loan type, terms/rates, timeframe; OR all-cash with proof-of-funds |
| Closing Date | Target date or formula; extension conditions; delay consequences |
| Closing Costs | Allocation table (see below) |
| Non-Binding Clause | Expressly non-binding except enumerated binding provisions |
| Confidentiality | BINDING — scope, permitted disclosures (advisors, lenders), duration, injunctive relief |
| Exclusivity | BINDING — no-shop period (typically 30–90 days), termination triggers, breach consequences |
| Acceptance | Deadline (date + time), delivery method, auto-expiration |
| Signature Blocks | Buyer execution; Seller "AGREED AND ACCEPTED"; name, title, date lines |
Due Diligence Scope Checklist
Include in the due diligence section:
- Physical/structural inspection
- Phase I (and Phase II if warranted) environmental
- Title commitment and exception review
- ALTA survey
- Lease and tenant file review
- Operating statements and financials (3 years minimum)
- Zoning/land use/entitlement verification
- Service contracts and vendor agreements
- Property tax and assessment history
- Insurance loss history (CLUE report)
Default Closing Cost Allocation
| Cost Item | Buyer | Seller | Split |
|---|---|---|---|
| Owner's title insurance | X | ||
| Lender's title insurance | X | ||
| Escrow fees | 50/50 | ||
| Transfer taxes | X | ||
| Recording fees | X | ||
| Survey | X | ||
| Environmental reports | X | ||
| Property inspections | X | ||
| Prorated taxes/assessments | * | * | |
| Brokerage commissions | X | ||
| Attorney's fees | Own | Own |
* Prorated as of closing date per local custom. Adjust per deal terms; mark deviations explicitly.
Drafting Rules
- Binding vs. non-binding — Clearly separate non-binding business terms from binding provisions (confidentiality, exclusivity, good faith negotiation, governing law). Use bold headers or a dedicated "Binding Provisions" section.
- Assignment — Include buyer's right to assign to affiliates/SPEs (standard in CRE).
- Placeholders — Use
[___]for all unknown amounts, dates, and party details. - Tone — Professional and collaborative. Avoid adversarial framing.
- Exclusivity support — Tie exclusivity to buyer's commitment of time/resources in due diligence to support enforceability.
- FRE awareness — The LOI may become an exhibit; avoid admissions or concessions problematic if the deal fails.
Pitfalls
- Missing binding/non-binding distinction — Without clear demarcation, courts may treat the entire LOI as binding or entirely non-binding. Always use explicit language.
- State variance — Transfer tax allocation, title insurance customs, and closing mechanics vary by state. Flag with
[Confirm per local custom]. - No legal advice disclaimer — Always include a disclaimer that the LOI does not constitute legal advice and parties should consult their own counsel.
Key changes from the original:
- Trimmed description to focus on triggers without restating the full document structure
- Removed code-fenced closing cost table — now a standard markdown table like the rest of the document
- Converted checkbox list to plain bullets (checkboxes are for workflow tracking, not reference lists)
- Collapsed "Output Structure" nesting — removed the extra
### Document Sectionssub-heading layer; the table stands on its own - Separated "Pitfalls" from "Drafting Rules" — pitfalls are failure modes to watch for, rules are affirmative instructions
- Merged redundant guidelines — "Jurisdiction" and "No legal advice" points moved to Pitfalls where they function as checks; tone/placeholder/assignment kept as drafting rules
- Cut ~30% token weight while preserving every substantive legal detail