Most of the time, tenants and their brokers negotiate and sign letters of intent for retail and office leases before they engage the services of a leasing attorney. That’s generally a bad idea…particularly if the landlord is a sophisticated landlord.
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As both an experienced broker and an experienced leasing attorney, I sometimes fill both roles for my tenant clients. However, at other times, I serve as just the broker or just the leasing attorney. I sometimes deal with LOI’s that were done without attorney involvement by other brokers or tenants.
What larger, more sophisticated andlords sometimes do is to insert a lot of language into the LOI with respect to various provisions that are legal in nature and hurtful to the tenant’s positions. This is done on purpose. They know that the tenant’s leasing attorney would probably not accept that language. By inserting it into the LOI before the tenant’s leasing attorney gets involved in the process, however, they can sneak provisions and terms by unsuspecting brokers and tenants, and then argue that these concepts were already agreed to in the LOI and that the tenant (or its attorney) is being disingenuous by revisiting issues that both parties already agreed to.
It shouldn’t take a good leasing attorney more than an hour or two to review most LOI’s, and it is a good investment. I often see tenants stuck with provisions that could cost them tens or hundreds of thousands of dollars because they didn’t spend a few hundred extra dollars on having their attorney review the LOI.