LOIs are the foundation of the house 🏠

I’ve got a confession to make - I don’t pre-rinse my dishes before I put them in the dishwasher. Don’t believe in it. I heard on a podcast once that modern dishwashers are designed to wash dirty dishes, and the pre-rinse just wastes water. So, basically, I’m a #DomesticDutyQueen AND an environmentalist.

Also, I am obsessed with efficiency and I abhor extra steps. This may surprise some of you, since so many of my working hours are spent crafting and negotiating the LOI, a document with no legal standing that gets crumpled up and thrown out in favor of the almighty lease. (Hopefully recycled, because the environment.) So, what’s the point?

Let’s pretend your lease is like a house that you’re building from scratch to suit the needs of your business. In this metaphor, the LOI is your blueprint, and the lease is the finished house built from those plans.

On its own, the blueprint isn’t much more than a few sheets of paper. Just like the LOI, it has no inherent value - and yet, careful thought and consideration on this first step will save you considerable time and money on building the final product that you’ll live with for years to come.

When you’re constructing a house from a set of plans, there will be dozens of decisions still to be made once the work begins. Writing a lease, these will be legal issues (ie. What happens if you are late paying rent? Is there a grace period? A late charge?).

Of course, you could conceivably build a house with no blueprints - but picture that for a moment. You have the whole crew out there, day one, and have to make every decision in real time. If you don’t know what the finished product will be at the start, you won’t be able to be intentional about the foundational elements as you build them. And what if you learn the site you picked can’t actually support the structure you’re building after all? Ouch - you’re back to square one, with all of that time and money wasted.

So, can you write a lease without an LOI? Of course you can. But, just like building a house with no blueprints, it’s going to take a hell of a lot longer. (And when lawyers are involved, time equals money.) So, while it makes sense to spend money figuring out how you pay your rent, you’re not going to want to pay legal fees only to learn that you and the landlord can’t agree on what the rent should be.

In conclusion, unlike using your fingernails to pick the congealed baked ziti out of the casserole dish, LOIs do, actually have a real and valuable purpose. And, like your trusty dishwasher, a good broker will do the dirty work for you.