An RV park letter of intent can shape the economics and negotiating leverage of a sale before the final purchase agreement is drafted. Although many LOIs describe themselves as nonbinding, provisions covering exclusivity, confidentiality, property access, expenses, and negotiation obligations may still create enforceable commitments.
This article explains what RV park sellers should review before signing, including the purchase price, transaction structure, buyer financing, deposit terms, due diligence, asset allocation, seller financing, closing conditions, and no-shop period. It also shows how two offers with similar prices can produce very different levels of cash, risk, and closing certainty.
An LOI should be reviewed by a transaction attorney in the state governing the deal. The document’s wording and the parties’ conduct can affect whether particular provisions are enforceable.
This article provides general educational information and is not individualized legal, tax, accounting, lending, or investment advice.
Is an RV Park Letter of Intent Legally Binding?
An RV park letter of intent commonly records the major terms the buyer and seller expect to include in a later purchase agreement. It may identify the price, assets included, financing plan, due diligence period, expected closing date, and conditions that must be satisfied.
Calling the document an LOI does not, by itself, determine whether it is binding. Courts may consider the wording, level of detail, governing law, surrounding communications, and whether the parties clearly reserved the right not to be bound until a definitive agreement was signed.
In one federal appellate case, most of an LOI was expressly nonbinding, but the parties separately agreed that its exclusivity provision was binding. Delaware litigation has also shown that a stated obligation to negotiate definitive terms in good faith can be enforceable and may create substantial damages exposure. These cases illustrate possible outcomes, not a rule that applies identically in every state.
Separate the binding and nonbinding provisions
The document should clearly identify which sections are intended to take effect immediately.
Terms frequently written as binding include:
- Confidentiality
- Exclusivity or no-shop obligations
- Buyer access to the property and records
- Allocation of professional expenses
- Return or destruction of confidential information
- Public-announcement restrictions
- Governing law and dispute procedures
- Termination of negotiations
- Obligations to negotiate in good faith
The price, financing structure, closing date, and other deal terms may be described as nonbinding and subject to a final purchase agreement. However, the seller’s attorney should confirm that the language is consistent throughout the document.
An introductory paragraph saying “this LOI is nonbinding” may conflict with a later provision stating that the seller “shall sell” and the buyer “shall purchase” the RV park. Ambiguous language can create a dispute over whether the parties reached an agreement or merely documented their current negotiating position.
Review any obligation to negotiate in good faith
A requirement to negotiate in good faith may sound less restrictive than a firm obligation to close, but it can still affect how the seller conducts later negotiations.
The seller should understand:
- How long the negotiation obligation lasts
- Which terms have already been agreed upon
- Whether either party can change its position
- What conduct could be characterized as bad faith
- Whether the obligation ends when due diligence reveals a problem
- Whether damages or other remedies are addressed
A seller should not agree to negotiate toward terms that are incomplete, economically unacceptable, or inconsistent with the intended tax structure.
Confirm the LOI’s expiration and termination rights
The RV park letter of intent should state when it expires and how either party may terminate discussions.
Review whether the LOI ends:
- On a specific date
- When the purchase agreement is signed
- When either party gives written notice
- When the buyer fails to deliver financial information
- When the due diligence or exclusivity period expires
- When a stated closing condition cannot be satisfied
The document should also explain which provisions survive termination. Confidentiality, expense allocation, return of documents, and dispute provisions often remain effective even after the proposed transaction ends.
Financial Terms in an RV Park Letter of Intent
The purchase price is important, but it is only one component of the offer. Sellers should evaluate how the price will be paid, what liabilities transfer, which assets are included, and what adjustments can reduce the amount received at closing.
Define the transaction structure
The RV park letter of intent should state whether the buyer proposes an asset acquisition or an ownership-interest acquisition.
In an asset sale, the buyer may acquire:
- Land and buildings
- RV sites and utility infrastructure
- Cabins or park models
- Furniture, fixtures, and equipment
- Vehicles and maintenance assets
- Reservation systems and websites
- Trade names, customer relationships, and goodwill
- Assignable contracts, licenses, and permits
In an equity transaction, the buyer acquires shares, membership interests, or partnership interests in the entity that owns the RV park. The entity may retain its historical contracts, liabilities, tax attributes, licenses, and legal risks.
The structure can materially affect taxes, buyer due diligence, lender approval, personal guarantees, and liabilities retained by the seller. The LOI should not leave the asset-versus-equity decision unresolved if it is central to the offer.
Break down the purchase price
The LOI should show more than one total number. It should explain the proposed sources of consideration.
Consider this hypothetical offer:
| Purchase Price Component | Illustrative Amount |
| Cash from buyer at closing | $1,500,000 |
| New acquisition financing | $3,600,000 |
| Seller-financed promissory note | $900,000 |
| Total stated purchase price | $6,000,000 |
The stated price is $6 million, but the seller is not receiving $6 million in immediately available cash. The seller note creates collection risk and delays receipt of $900,000 of principal.
The seller should review:
- Cash due at closing
- Debt assumed by the buyer
- Seller-financed principal
- Interest rate and payment schedule
- Earnout or contingent payments
- Holdbacks and escrowed amounts
- Working-capital adjustments
- Repair or capital-expenditure credits
Every example in this article is hypothetical and should not be treated as an average RV park sale structure or market benchmark.
Examine the buyer’s financing condition
A financing contingency should identify what financing the buyer needs and how long the buyer has to obtain it.
Important questions include:
- How much equity will the buyer contribute?
- Has the buyer provided proof of funds?
- Is there a lender term sheet or only an initial conversation?
- What loan amount, amortization, and closing date are assumed?
- Can the buyer terminate if the offered rate changes?
- Is the contingency based on financing satisfactory to the buyer in its sole discretion?
- When must the buyer submit a complete loan application?
- When does the financing contingency expire?
As of July 2026, the SBA states that its 7(a) program may finance complete or partial changes of ownership and has a maximum loan amount of $5 million. An LOI relying on SBA financing above that limit would require additional capital or financing sources, although the program limit alone does not determine whether a particular transaction qualifies.
The seller should request enough information to assess whether the proposed capital stack is realistic before removing the RV park from the market.
Review the earnest-money deposit
The RV park letter of intent may state the expected deposit even if the detailed escrow provisions will appear in the purchase agreement.
The seller should review:
- Deposit amount
- Due date
- Escrow holder
- Whether it increases after due diligence
- When it becomes nonrefundable
- Permitted reasons for a refund
- Treatment after buyer default
- Whether it is credited toward the price
- Whether the seller’s remedy is limited to retaining the deposit
A large deposit is not necessarily meaningful when it remains refundable until shortly before closing. Compare the deposit amount with the length and breadth of the buyer’s termination rights.
Address purchase-price allocation early
An RV park is generally sold as a group of individual assets rather than one tax asset. The parties may need to allocate the purchase price among land, buildings, site improvements, equipment, vehicles, inventory, goodwill, and other transferred property.
The IRS states that a lump-sum business sale is treated as a sale of each individual asset. When the applicable requirements are met, both buyer and seller use Form 8594 to report the allocation.
The buyer may prefer allocations that support faster depreciation or amortization. The seller may prefer allocations that reduce ordinary-income recapture. Because those incentives can conflict, the LOI should state whether:
- An allocation has already been proposed
- The allocation will be negotiated later
- The parties must use consistent reporting
- Independent valuations will be used
- Final allocation is a condition to signing the purchase agreement
The seller’s CPA should model the allocation before the seller accepts it.
Evaluate seller-financing terms
When the buyer asks the seller to carry a note, the LOI should address more than the interest rate.
Review:
- Principal amount
- Amortization and maturity
- Balloon payment
- Payment frequency
- Collateral
- Lien priority
- Personal guarantees
- Financial-reporting requirements
- Transfer restrictions
- Default rate
- Cure period
- Acceleration rights
- Prepayment rights
- Subordination to the buyer’s lender
The seller should also determine whether the buyer’s senior lender will permit the proposed note. A seller note shown in an LOI may later be required to follow different terms, remain on standby, or be subordinated as a condition of financing.
How to Calculate Your Net Proceeds From an RV Park Sale.
Due Diligence Terms in an RV Park Letter of Intent
The buyer needs sufficient access to evaluate the investment, but an unrestricted due diligence clause can allow the buyer to control the property for an extended period while retaining a broad right to terminate.
The RV park letter of intent should define the review period, required documents, physical access, testing rights, confidentiality obligations, and deadline for raising objections.
Set a defined due diligence period
There is no universal due diligence period that is appropriate for every RV park. The required time depends on financing, property size, utility systems, environmental questions, financial-record quality, permits, site leases, and the proposed transaction structure.
A hypothetical LOI might provide:
- 45 days for general due diligence
- A five-business-day document-delivery period
- Written notice of objections before the review deadline
- One 15-day extension in exchange for an additional nonrefundable deposit
These periods are examples, not recommended benchmarks. The seller and attorney should select deadlines based on the property and expected lender process.
The clock should begin on a clearly defined event, such as execution of the purchase agreement or delivery of a specified due diligence package. Avoid a period that starts only when the buyer decides the documents are complete.
Define the information the seller must provide
The LOI may summarize the buyer’s document requirements, including:
- Tax returns and profit-and-loss statements
- Reservation and occupancy reports
- Current rent roll
- Rate schedules
- Payroll and staffing records
- Utility bills
- Licenses and permits
- Surveys, title policies, and zoning records
- Environmental reports
- Insurance policies and claims
- Equipment and vehicle lists
- Vendor, employee, and management contracts
- Capital-expenditure history
- Loan and lien information
The seller should confirm that these records exist and can legally be disclosed. Personal guest information, employee records, payment data, and confidential business information may require redaction or controlled access.
Limit physical inspections and invasive testing
Buyer access provisions should specify:
- Required advance notice
- Permitted inspection hours
- Whether seller representatives must attend
- Rules for contacting employees, tenants, guests, or government agencies
- Insurance requirements
- Responsibility for property damage
- Indemnification
- Restoration after testing
- Whether drilling, soil sampling, or other invasive work requires separate consent
The seller should avoid allowing a prospective buyer to disrupt guests, employees, or campground operations without reasonable controls.
A buyer may request a Phase I environmental site assessment or other environmental review. EPA describes “all appropriate inquiries” as a process for evaluating environmental conditions and potential contamination liability. For certain federal landowner protections, the assessment generally must be completed or updated within one year before acquisition, with specified components completed within 180 days.
Review the buyer’s termination standard
A buyer may request the right to terminate when due diligence is unsatisfactory “in the buyer’s sole and absolute discretion.”
That wording gives the buyer broad flexibility. The seller may instead negotiate:
- A shorter discretionary review period
- A deadline for identifying objections
- Specific categories of acceptable objections
- A cure or response period
- A deposit increase after approval
- Automatic waiver if no notice is delivered
- Limited termination rights after due diligence
The seller should know exactly when the buyer becomes committed and what conditions remain after that point.
Control confidentiality and communications
The LOI should restrict the buyer’s use and disclosure of financial, operational, employee, and guest information.
It should address:
- Who may receive confidential records
- Use of information solely for evaluating the acquisition
- Responsibility for advisors and lenders
- Prohibition on contacting employees or guests without approval
- Government and utility inquiries
- Return or destruction of information
- Required disclosure under law
- Remedies for unauthorized disclosure
The buyer may need to speak with regulators, utility providers, or local officials. Those contacts should be coordinated so the buyer does not create concern about a sale that may never close.
Understand the exclusivity or no-shop period
Exclusivity prevents the seller from negotiating with other buyers for a stated period. Because courts can enforce an exclusivity clause even when the rest of an LOI is nonbinding, this section deserves the same care as a formal purchase-contract provision.
Review:
- The length of the no-shop period
- Whether the seller must stop existing negotiations
- Whether the seller can receive unsolicited offers
- Whether the broker may continue marketing
- Whether the seller must notify the buyer of competing interest
- Milestones the buyer must meet
- Automatic extensions
- Remedies for breach
- Events that terminate exclusivity
Exclusivity should generally be tied to buyer performance. The seller may require proof of funds, lender progress, document review, a draft purchase agreement, or payment of a deposit by specified dates.
A buyer that misses a milestone should not automatically retain exclusive control over the opportunity.
How to Review an RV Park Letter of Intent Before Signing
Sellers should review the entire offer as an interconnected package. A strong price can be weakened by broad termination rights, uncertain financing, a long exclusivity period, or substantial seller financing.
Compare the economic value of competing offers
Consider two hypothetical offers:
| Term | Buyer A | Buyer B |
| Purchase price | $6,000,000 | $5,850,000 |
| Cash at closing | $5,100,000 | $5,850,000 |
| Seller note | $900,000 | $0 |
| Due diligence | 60 days | 35 days |
| Financing contingency | 75 days | None |
| Initial deposit | $50,000 | $150,000 |
| Deposit nonrefundable | After 60 days | After 35 days |
| Exclusivity | 90 days | 45 days |
Buyer A offers $150,000 more, but Buyer B provides more immediate cash, a shorter review period, no financing contingency, and a larger deposit.
The better offer depends on the seller’s priorities, tax position, confidence in each buyer, and willingness to accept repayment risk. The price alone does not answer the question.
Review all closing conditions
The RV park letter of intent should identify major conditions expected to appear in the purchase agreement.
Possible conditions include:
- Satisfactory due diligence
- Clear or insurable title
- Financing approval
- Appraisal
- Environmental review
- Transfer of permits and licenses
- Zoning confirmation
- Lender consent
- Franchise or management approval
- Minimum operating results
- No material adverse change
- Seller completion of agreed repairs
- Approval by members, partners, shareholders, or a probate court
Vague conditions give either party less certainty. A requirement for “all approvals satisfactory to buyer” should identify the approvals that are actually expected.
Define the assets and liabilities included
The LOI should identify whether the buyer receives:
- Accounts receivable
- Accounts payable
- Guest and tenant deposits
- Prepaid reservations
- Inventory
- Cash
- Vehicles
- Equipment
- Park models or rental cabins
- Websites and telephone numbers
- Trade names
- Contracts
- Employees
- Permits and licenses
The parties should also address the treatment of reservations and payments covering dates after closing. The seller may need to credit the buyer for money collected in advance while transferring the obligation to provide the future stay.
Clarify operations before closing
A seller may be required to operate the RV park in the ordinary course between signing and closing.
Review restrictions on:
- Increasing rates
- Hiring or terminating employees
- Entering long-term contracts
- Making owner distributions
- Purchasing equipment
- Incurring new debt
- Completing repairs
- Accepting long-term reservations
- Changing insurance
- Settling claims
The seller should retain enough flexibility to operate safely and respond to emergencies. Buyer consent requirements should include reasonable response deadlines and exceptions for urgent work.
Address transition and post-closing obligations
The buyer may request assistance after closing. The LOI should state whether the seller will provide:
- Employee introductions
- Vendor handoffs
- Reservation-system training
- License-transfer support
- Guest communications
- Consulting services
- A noncompetition agreement
- Use of the seller’s name or credentials
- Assistance with unresolved permits
Define the length, schedule, compensation, travel obligations, and scope of any consulting arrangement. Avoid an open-ended promise to provide support “as needed.”
Require buyer identification and authority
The seller should know which person or entity is making the offer.
Confirm:
- Buyer’s legal name
- State of formation
- Ownership and decision-makers
- Authorized signer
- Acquisition entity
- Equity source
- Guarantors
- Lender or financing source
- Experience owning or operating similar property
An LOI signed by a newly formed entity with no disclosed ownership, financing, or guaranty provides limited evidence that the buyer can complete the transaction.
Have advisors review the LOI before execution
The seller’s transaction attorney should review the legal terms. The CPA should evaluate asset allocation, seller financing, estimated gain, and entity-specific consequences. The broker should assess the buyer’s credibility, offer economics, and market implications.
Review should occur before signing because the seller may immediately become subject to binding confidentiality, exclusivity, access, expense, or negotiation obligations.
Review the Entire Deal Before Agreeing to the Price
An RV park letter of intent is not merely a summary of the buyer’s price. It establishes the framework for due diligence, financing, exclusivity, purchase-contract negotiations, and the eventual closing.
Before signing, confirm:
- Which provisions are binding
- Whether the deal is an asset or equity sale
- How much cash is due at closing
- Whether the buyer’s financing plan is realistic
- What seller financing or holdbacks are required
- How long due diligence and exclusivity will last
- When the deposit becomes nonrefundable
- How the price will be allocated
- Which assets and liabilities transfer
- What conditions allow the buyer to terminate
A careful LOI review can prevent the seller from losing negotiating leverage or committing to a structure that produces less cash, more risk, or an unfavorable tax result.
Reviewing an offer or preparing to sell? Get a free RV park valuation to understand the property’s current market position before evaluating price and terms.
Frequently Asked Questions
Is an RV park letter of intent legally binding?
It can be partly or fully binding depending on its language, governing law, and surrounding circumstances. Many LOIs make the proposed sale terms nonbinding while treating confidentiality, exclusivity, property access, expenses, and good-faith negotiation provisions as binding. A transaction attorney should review the document before it is signed.
Can an RV park seller accept another offer after signing an LOI?
The answer depends on the exclusivity provision. A binding no-shop clause may prevent the seller from soliciting, discussing, or accepting competing offers for a stated period. Some clauses permit receiving unsolicited offers but prohibit negotiations. The exact wording, termination rights, and applicable state law control.
How long should RV park due diligence take?
There is no universal period. Timing depends on financing, environmental review, utilities, zoning, financial-record quality, permits, and property complexity. The LOI should use a defined deadline, identify when the period begins, limit extensions, and state when the deposit becomes nonrefundable.
Should purchase-price allocation appear in the LOI?
It should at least be addressed when allocation could materially affect either party. An RV park asset sale may allocate value among land, buildings, improvements, equipment, and goodwill. The seller should have a CPA model the tax consequences before agreeing to a final allocation.
How much earnest money should an RV park buyer deposit?
There is no reliable nationwide amount or percentage. The appropriate deposit depends on the price, buyer financing, diligence length, market demand, and termination rights. Sellers should focus on when the deposit becomes nonrefundable and whether it reasonably compensates them for taking the property off the market.