Any proposed transaction begins with the drafting of a document
that clearly states the primary terms that both parties have agreed
to: this document is referred to as 'Heads of Terms' (HOTS) and is
commonplace in the commercial property market.

A HOTS isn't compulsory to produce, but it still recognised as
the draft of the main contract.  As a result, both parties
will be subject to the comprehensive agreements described within
the main contract: put more simply, once the HOTS is agreed on, the
official legal work can begin.

Generally speaking, developing the HOTS can be a fairly simply
task - both the landlord and the agent are legally permitted to
draft the HOTS for the other party to approve.

The HOTS is usually most key when dealing with overseas
companies.  In this case, both parties are required to clearly
state their requirements in a draft sent to the opposite company,
and are also required to identify the opposite party's
requirements.  This helps to eliminate any confusion the
companies may have; in this case, the HOTS is incredibly
useful.  (Needless to say, in these cases a professional
translator should be hired).

A number of different points can be included within the HOTS,
including:

The rental value of the property

The payment method and currency to be used

A description of the transaction

A proposed timeline of the transaction process

When the translator has completed the documents, both parties
are provided with the agreement (if they're international, they'll
receive it in their own language) that sets out the important
point.

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