White Paper

Estimates in Letters of Intent Can Come Back to Bite

 
With the beginning of the new year, it is important to remember that letters of intent—and landlord generated items delivered pursuant to a letter of intent ‐ have legal consequences, even when the terms of the letter of intent clearly state that matters covered in the letter of intent are “estimates”, and that the letter of intent does not evidence a “binding contract.” A recent case in point is the Thrifty Payless v. The Americana at Brand case decided in 2013.1

Background and Issues Raised
The case arose from a lease transaction between Thrifty and The Americana at Brand at its shopping center in Glendale, California. Landlord’s agent prepared a letter of intent that, among other things, listed Thrifty’s share of “estimated” real property taxes, insurance and common area expenses for the first year of the lease term. The letter of intent clearly identified the dollar amounts for these charges as estimates. Thrifty requested a budget and, in response, landlord’s vice president for leasing provided Thrifty with a budget and wrote “[p]lease remember that the costs reflected are purely estimated values.”

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Manuel Fishman, Esq. is a Shareholder with Buchalter Nemer. He focuses his practice on representing real estate developers and owners in the acquisition, sale and financing of commercial properties. Mr. Fishman has an active leasing practice representing owners of several major office buildings in San Francisco, including the Transamerica Pyramid, as well as tenants in lease and sublease transactions. He serves as chair of the Building Owners and Managers Association of San Francisco’s Government Affairs and Policy Advisory Committee.

Faculty

Manuel Fishman, Esq.

Manuel Fishman, Esq.

Buchalter Nemer

Agenda

Faculty

Manuel Fishman, Esq.

Manuel Fishman, Esq.

Buchalter Nemer

  • Shareholder with Buchalter Nemer
  • Focuses practice on representing real estate developers and owners in the acquisition, sale, and financing of commercial properties
  • Active leasing practice representing owners of several major office buildings in San Francisco, including the Transamerica Pyramid, as well as tenants in lease and sublease transactions
  • Expertise includes letters of intent, tenant improvement work agreements, security deposits/letters of credit, signage rights, expansion and contraction rights, permitted transfers, operating expense audits, and lender and master landlord recognition agreements and extensive experience in the area of ground leasing and retail leasing
  • Leading attorney in the area of landline and wireless communications and Internet-based services in commercial properties and rooftop installations
  • 2020 Best Lawyer in America in real estate law, an honor he has received since 2007; 2014 Top Rated Lawyer by American Lawyer Media, 2012-2018; one of Bay Area Magazine’s Top Lawyers in the Bay Area; and recipient of the 2019 Raymond C. Nann Distinguished Service Award
  • Frequent lecturer on office and shopping center leasing matters and frequently writes for industry newsletters
  • J.D. degree, magna cum laude, Santa Clara University School of Law; B.A. degree, State University of New York at Purchase
  • Can be contacted at [email protected] or 415-227-3504

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