Land Lease Contract Template for Indonesia

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Key Requirements PROMPT example:

Land Lease Contract

"I need a Land Lease Contract for a 5-hectare industrial plot in Jakarta Industrial Estate, starting March 1, 2025, between PT Manufacturing Indonesia (tenant) and PT Land Holdings (landlord), with provisions for future development rights and environmental compliance."

Document background
The Land Lease Contract is essential for businesses and individuals seeking to secure land use rights in Indonesia without full ownership transfer. This document type is particularly relevant given Indonesia's restrictions on foreign land ownership and its unique land rights system based on the Basic Agrarian Law. The contract must address specific requirements under Indonesian law, including permitted land use, development rights, and compliance with local regulations. The agreement typically includes provisions for lease duration, rental payments, maintenance obligations, and development permissions, while considering both civil law requirements and customary (adat) law where applicable. This contract type is commonly used in commercial, industrial, and agricultural contexts, requiring careful attention to zoning regulations, environmental requirements, and foreign investment restrictions where relevant.
Suggested Sections

1. Parties: Identification of the lessor and lessee, including complete legal names, addresses, and registration details if companies

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

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

4. Land Description: Detailed description of the leased land, including certificate number, location, boundaries, and size

5. Lease Term: Duration of the lease, commencement date, and conditions for renewal

6. Rent and Payment Terms: Rental amount, payment schedule, method of payment, and late payment provisions

7. Security Deposit: Amount, terms, and conditions for return of the security deposit

8. Permitted Use: Specified allowed uses of the land under Indonesian zoning laws and regulations

9. Parties' Rights and Obligations: Detailed responsibilities of both lessor and lessee

10. Maintenance and Repairs: Responsibilities for land maintenance and any existing structures

11. Insurance: Required insurance coverage and responsibilities

12. Assignment and Subletting: Conditions under which the lease may be assigned or the land sublet

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

14. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms

15. Notices: Process and addresses for formal communications between parties

16. Execution: Signature blocks and execution requirements under Indonesian law

Optional Sections

1. Development Rights: Used when the lease includes rights to develop or construct on the land, including permits and approvals required

2. Environmental Compliance: Include when the land use involves environmental considerations or when required by local regulations

3. Agricultural Provisions: Required for agricultural land leases, including cultivation rights and obligations

4. Foreign Investment Provisions: Include when the lessee is a foreign entity, addressing specific requirements under Indonesian investment law

5. Local Community Rights: Include when the land is subject to traditional (adat) law or community rights

6. Force Majeure: Optional but recommended clause addressing natural disasters and other unforeseeable circumstances

7. Language Provisions: Required when the contract is bilingual, specifying the prevailing language

8. Tax Provisions: Detailed tax arrangements when complex tax considerations apply

Suggested Schedules

1. Land Title Certificate: Copy of the land certificate and ownership documentation

2. Site Plan: Detailed plan showing the boundaries and location of the leased land

3. Payment Schedule: Detailed breakdown of rent payments and due dates

4. Permitted Use Details: Specific details of allowed activities and development on the land

5. Required Permits: List and copies of necessary permits and licenses

6. Condition Report: Initial condition assessment of the land and any existing structures

7. Environmental Report: Environmental assessment or compliance documentation if required

8. Local Authority Approvals: Copies of relevant local authority permissions and approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Agriculture

Industrial Manufacturing

Mining

Hospitality

Retail

Logistics

Infrastructure

Commercial Property

Residential Development

Forestry

Energy

Tourism

Relevant Teams

Legal

Real Estate

Facilities Management

Operations

Finance

Compliance

Project Management

Property Development

Risk Management

Corporate Services

Business Development

Investment

Environmental Affairs

Relevant Roles

Legal Counsel

Property Manager

Real Estate Director

Facilities Manager

Land Acquisition Manager

Business Development Manager

Operations Director

Chief Financial Officer

Investment Manager

Compliance Officer

Project Manager

Site Manager

Corporate Real Estate Manager

Property Development Director

Land Rights Specialist

General Counsel

Risk Manager

Industries
Basic Agrarian Law No. 5 of 1960 (Undang-Undang Pokok Agraria): The fundamental law governing land rights in Indonesia, establishing the basic principles of land law and different types of land rights including leasehold rights (Hak Guna Bangunan and Hak Guna Usaha)
Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata): Provides the basic principles of contract law, including requirements for valid agreements, rights and obligations of contracting parties, and general provisions on lease agreements
Government Regulation No. 40 of 1996: Specific regulation on Right to Cultivate, Right to Build, and Right to Use of Land, which details the rights and obligations related to different types of land use
Law No. 25 of 2007 on Investment: Regulates foreign investment aspects including restrictions and requirements for foreign entities leasing land in Indonesia
Regional Spatial Planning Law No. 26 of 2007: Governs spatial planning and land use restrictions that may affect the permitted use of leased land
Environmental Protection and Management Law No. 32 of 2009: Sets environmental obligations and restrictions that may affect land use and development activities on leased land
Government Regulation No. 103 of 2015: Regulates house or residential ownership by foreigners domiciled in Indonesia, which may affect residential property lease terms
Law No. 28 of 2002 on Buildings: Regulates building requirements and standards that may affect the use of leased land for construction purposes
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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