Real Estate: Letter of Intent
In many real estate transactions, a letter of intent may be drafted between the involved parties. This document may be created during negotiation of sale or purchase and usually outlines one or more agreements before the transaction is finalized. It is devised to clarify the key points of the arrangement, which may need further negotiation. However, there are instances when letter of intent may give rise to a legal matter.
The Crucial Issues
There are several complications and disputes that may arise in cases where terms and conditions are not clearly specified in the letter of intent, especially when it comes to real estate. In real estate transactions, the common problem that arises includes deposit amount and purchase prices during the due diligence stage, or at the time of purchase.
It is also possible problems may arise after the survey, or at the closing stage. Therefore, it is critical all the terms listed in the letter of intent should be explicitly mentioned and reviewed by an experienced real estate lawyer to prevent such cases.
Binding or Non-Binding?
The primary concern with a letter of intent in legal actions is whether the terms stated in the document are binding or non-binding terms. These issues usually result in a conflict between parties, which ultimately leads to a litigation.
In real estate cases where the letter of intent is devised to serve as a contractual obligation, the clauses included in the document are legally binding. Hence, in case of a breach of term, the party at fault may owe monetary damages to the other party.
Conversely, if the clauses are non-binding, an individual cannot seek legal course or ensure the opposite party will keep their word. Parties can use strong non-binding language in the letter of intent to affirm negotiations may be terminated at any time.
The Legal Action
If the opposite party has breached a legally binding clause stated in the letter of intent pertaining to real estate, you can file a lawsuit against them to claim the owed amount by hiring a competent real estate lawyer. However, it is necessary you are able to prove that breach occurred and provide damages in monetary terms.
A skillful real estate lawyer will initially try to negotiate a resolution so the opposite party upholds the condition. This may help you to avoid litigation, which may prove to be costly and time-consuming. However, if the negotiations are unsuccessful, they will devise a strong case in your favor and ensure your best interests are protected during the case.
If you wish to get more information on letter of intent in real estate transactions or want to schedule a consultation with an experienced real estate lawyer, contact Dan Walker Law Office at (630) 920-8800.