Property Management
In Pennsylvania commercial leasing, what is a 'letter of intent' (LOI) and is it binding?
AA binding preliminary contract requiring both parties to proceed to a formal lease
BA non-binding document outlining the principal terms of a proposed lease before formal negotiations; typically not binding unless specifically stated to be✓ Correct
CPREC's required form summarizing a commercial lease's terms
DA binding deposit agreement confirming the tenant's intent to lease
Explanation
A Letter of Intent (LOI) in commercial leasing outlines the key deal terms (rent, term, TI allowance, options) before the formal lease is drafted. LOIs are typically non-binding on the substantive deal terms, allowing either party to walk away.
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