Document background
The Letter Of Intent (Real Estate) is a crucial preliminary document used in South African property transactions to formally express interest in purchasing or leasing property while setting out the basic proposed terms. It serves as a stepping stone between initial discussions and the final binding agreement, commonly used in both commercial and residential property transactions. While generally non-binding, it demonstrates serious intent and typically includes key commercial terms, proposed timelines, due diligence requirements, and any exclusivity periods. The document must align with South African property law requirements and market practices, particularly considering the Alienation of Land Act and Property Practitioners Act. It's especially valuable in complex transactions where parties need to outline their understanding before incurring the costs of full due diligence and detailed agreements.
