Land Development Agreement Template for Indonesia

The Land Development Agreement is a crucial document used in Indonesian property development projects to establish a legally binding relationship between landowners and developers. This agreement is essential when undertaking any significant land development project in Indonesia, whether for commercial, residential, or mixed-use purposes. It must comply with Indonesian legal framework, particularly the Basic Agrarian Law No. 5/1960, Spatial Planning Law No. 26/2007, and relevant local regulations. The document typically includes comprehensive details about development rights, construction specifications, environmental requirements, necessary permits, financial arrangements, and risk allocation. Given Indonesia's complex land rights system and multi-layered regulatory requirements, the Land Development Agreement serves as a foundational document that ensures all parties understand their rights, obligations, and the project's scope while maintaining compliance with local and national regulations.

1. Parties: Identification of the landowner and developer, including their complete legal names, addresses, and registration details

2. Background: Context of the agreement, including brief description of the land, development objectives, and parties' intentions

3. Definitions: Definitions of key terms used throughout the agreement, including technical development terms and Indonesian legal terms

4. Project Scope: Detailed description of the development project, including nature of development, permitted uses, and development phases

5. Land Rights and Title: Confirmation of land ownership, title details, and any existing encumbrances or restrictions

6. Development Obligations: Developer's obligations regarding construction, timeline, quality standards, and compliance with regulations

7. Permits and Approvals: Requirements for obtaining necessary governmental approvals, permits, and licenses

8. Timeline and Milestones: Project schedule, key milestones, completion dates, and consequences of delays

9. Financial Terms: Payment terms, development costs, profit sharing arrangements, and financial obligations

10. Environmental Compliance: Environmental protection requirements, impact assessments, and mitigation measures

11. Representations and Warranties: Parties' representations regarding authority, land title, and capacity to perform

12. Risk Allocation: Distribution of risks between parties, including construction risks and force majeure

13. Insurance: Required insurance coverage for the project and parties

14. Default and Termination: Events of default, remedies, and termination procedures

15. Dispute Resolution: Mechanisms for resolving disputes, including jurisdiction and governing law provisions

16. General Provisions: Standard clauses including notices, amendments, and entire agreement provisions