Heads of Terms in Commercial Property transactions

Heads of Terms (HOTs) set out the principal terms of an agreement. In their most simplest form in commercial property transactions, they set out the main terms of a transaction such as a proposed commercial lease or an investment purchase and are usually prepared by the landlord’s agent. 

They are not legally binding but, especially if you are a proposed tenant/buyer, it is advisable to take advice from a professional before they are finalised as the landlord, and their agents, are likely to object if you try to include additional points which were not in the original version. 

You may then be facing an upfill struggle to amend the terms of a deal the other side thought had already been agreed. We have also come across cases where a seller/landlord’s agent has omitted to set out the terms of a transaction which should properly have been included in the first place.

In more complex transactions, an initial draft is often prepared as a discussion document, and the buyer, and their professional advisers, are invited to comment. If there are several issues to cover, negotiations can take some time, but it is vital to get them agreed at the outset, rather than causing problems further down the line.

Jordans has the expertise to advise clients on these and can protect your interests by seeking to include points which a lay person would not think or be aware of.