Commercial Real Estate Letters of Intent in Alberta

1. Identify the parties, authority and property

Use complete legal names, the purchasing or selling entity, signing authority, municipal and legal descriptions and every parcel or interest in scope. Identify nominees, affiliates or entities to be formed without assuming a later substitution is permitted.

Schedule included and excluded land, buildings, leases, equipment, inventory, contracts and intangible assets. An address or marketing name is not a complete transaction perimeter.

• Legal parties
• Signing authority
• Titled parcels
• Included assets
• Excluded assets
• Assignment or nominee rights

2. State the consideration and structure

Record fixed price, price per acre or square foot, area assumptions, allocation, assumed obligations, vendor financing, holdbacks, earnouts and other consideration. State what changes if the surveyed or verified area differs.

Address whether GST is included or additional without presenting that wording as a tax conclusion. Tax and legal advisors should determine collection, self-assessment, allocation and filing.

3. Treat legal effect as a drafting question

Do not assume that calling a document an LOI, term sheet or non-binding proposal settles enforceability. Counsel should identify which provisions, if any, are intended to bind and whether the document creates an obligation to negotiate, an accepted agreement or no acquisition obligation.

Exclusivity, confidentiality, access, costs, governing law, public announcements and return of information can be treated differently from the proposed purchase terms. Make the intended separation explicit and obtain advice before signature.

4. Define the deposit rather than using it symbolically

State the amount, payment date, holder, trust terms, increase schedule, interest treatment, closing credit and what happens on termination, default or dispute. A proposed deposit does not by itself establish that a deal is binding, secure or non-refundable.

If a deposit will be received by a brokerage, the governing trust terms and Alberta requirements matter. Do not send funds until the destination has been independently verified through a trusted contact.

5. Build a condition and document schedule

List financing, title, zoning, environment, physical condition, leases, financial records, appraisal, partner or board approval and other required reviews. For each item, identify the beneficiary, evidence, deadline and notice process.

Create a dated seller-delivery schedule and define when the review period begins. A broad diligence label without access, documents and timing is not an executable work plan.

6. Control access, exclusivity and confidentiality

Set permitted inspections, intrusive testing, insurance, indemnity, restoration, tenant contact, employee contact, photography, report reliance and ownership. Sensitive financial, tenant and personal information should be released in stages.

If exclusivity is proposed, define start, end, extension, permitted seller activity and consequences. The owner should understand the value and carrying cost of taking the asset off the market.

7. Align approvals, milestones and the definitive agreement

Set target dates for acceptance, document delivery, site access, draft agreement, conditions, financing, closing and possession. Identify lender, investor, partner, franchisor, landlord, municipal or other third-party approvals without implying they are assured.

State whether the LOI expires if a definitive agreement is not signed and which provisions survive. Counsel should reconcile every commercial term into the purchase agreement rather than relying on the LOI to fill gaps.

8. Keep brokerage and professional roles clear

RECA Rule 43 says a commercial client relationship should use a written service agreement identifying services, responsibilities, remuneration, payment and termination. The brokerage should document its mandate and preserve transaction records.

Commercially can coordinate property facts, market strategy, parties, timelines and commercial terms. Commercially does not decide whether an LOI is binding, draft legal contracts, provide tax advice or replace legal review before signature.