Health Law Advisor

In our ongoing series of blog posts, we have examined key negotiating points for tenants in triple net health care leases. We also have offered suggestions for certain lease provisions designed to protect tenants from overreaching and unfair expenses, overly burdensome obligations, and ambiguous terms with respect to the rights and responsibilities of the parties. These suggestions are intended to result in efficient lease negotiations and favorable lease terms from a tenant’s perspective. In our previous blog posts, we considered the importance of negotiating initial terms and renewal terms, operating expense provisions, assignment and subletting terms, maintenance and repair obligations, holdover provisions and surrender terms, tenant improvement allowances, exclusivity, expansion and relocation provisions, and default provisions. This final blog post in our series focuses on negotiating the letter of intent.  

While a letter of intent (“LOI”) is usually non-binding, it is an extremely important part of the lease process and a valuable tool to make expectations clear and prevent time consuming and costly back and forth during lease negotiations. The topics covered in our earlier blog posts in this series should be addressed in the LOI, which should serve as a road map for the parties and counsel in drafting and negotiating the lease. By agreeing on these basic terms up front, the parties will significantly reduce the amount of back and forth needed to arrive at a lease both parties find acceptable.