Fractional Ownership Agreement Template for Indonesia

The Fractional Ownership Agreement serves as a crucial legal framework for parties seeking to share ownership of valuable assets in Indonesia. This document is particularly relevant when multiple parties wish to invest in high-value properties or assets while sharing costs and usage rights. It must comply with Indonesian legal requirements, including the Civil Code, Basic Agrarian Law, and investment regulations. The agreement typically includes detailed provisions for ownership structure, management, usage scheduling, expense sharing, and exit mechanisms. It's especially important in contexts where foreign ownership may be involved, requiring careful structuring to comply with Indonesian foreign ownership restrictions. The document should be prepared by legal professionals familiar with Indonesian property and investment laws to ensure all regulatory requirements are met.

1. Parties: Identification of all parties entering into the fractional ownership agreement

2. Background: Context of the agreement, description of the property, and purpose of the fractional ownership arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Ownership Structure: Details of ownership percentages, shares allocation, and legal structure of ownership

5. Purchase Price and Payment: Financial terms including purchase price, payment schedule, and initial capital contributions

6. Management and Administration: Governance structure, decision-making processes, and management responsibilities

7. Rights and Obligations: Detailed rights and responsibilities of each fractional owner

8. Usage Rights and Scheduling: System for allocating usage time and managing the property usage schedule

9. Operating Expenses and Maintenance: Cost sharing structure, maintenance obligations, and budget management

10. Insurance and Risk Management: Required insurance coverage and risk allocation between owners

11. Transfer Restrictions: Limitations on transfer of ownership interests and right of first refusal provisions

12. Exit Mechanisms: Procedures for selling interests, owner buyouts, and termination of the agreement

13. Default and Remedies: Events of default and corresponding remedies available to non-defaulting owners

14. Dispute Resolution: Procedures for resolving disputes between owners, including mediation and arbitration

15. Governing Law: Specification of Indonesian law as governing law and jurisdiction