Lease Extension Addendum Template for Indonesia

A lease extension addendum is an essential legal document that allows you to formally extend your existing rental agreement beyond its original expiration date. Under Indonesian law, this document serves as a contractual amendment that modifies the lease term while maintaining the core provisions of your original agreement. Rather than drafting an entirely new lease, the addendum provides a streamlined approach to continuing your landlord-tenant relationship under updated terms.

When do you need this document?

You need a lease extension addendum when your current lease is approaching its expiration date and both parties wish to continue the rental arrangement. This situation commonly arises in commercial properties where businesses want to maintain their established location, or in residential settings where tenants are satisfied with their accommodation and landlords prefer to retain reliable tenants. The addendum is particularly valuable when market conditions favor extending existing terms rather than renegotiating entirely new agreements. You may also need this document when your original lease included an option to extend, requiring formal documentation to exercise that right. Additionally, if your business requires lease continuity for licensing or operational purposes, an extension addendum ensures uninterrupted tenancy.

Key legal considerations

Several critical legal elements must be addressed in your lease extension addendum to ensure enforceability under Indonesian law. The document must clearly reference the original lease agreement, including its execution date and parties, to establish the legal foundation for the extension. You must specify the exact extension period, new rental amounts, and any modified terms while confirming which original provisions remain in effect. Payment terms, security deposits, and maintenance responsibilities should be clearly addressed, particularly if they differ from the original agreement. The addendum should include provisions for early termination, renewal options, and dispute resolution mechanisms. Additionally, ensure that any changes to property use, subleasing rights, or modification permissions are explicitly stated. Consider including inflation adjustment clauses for long-term extensions and specify whether utilities, taxes, or maintenance costs will be adjusted.

Legal requirements in Indonesia

Indonesian law imposes specific requirements for lease extension addendums that you must follow for legal validity. Under the Indonesian Civil Code (KUH Perdata), particularly Articles 1313-1351 covering general contract provisions and Articles 1548-1600 governing lease agreements, your addendum must meet standard contractual requirements including legal capacity of parties, lawful object, and proper consideration. For residential properties, compliance with Government Regulation No. 44 of 1994 is mandatory, which governs residential dwellings and tenant rights. Commercial lease extensions must consider Law No. 5 of 1960 (Basic Agrarian Law) regarding land rights and property use restrictions. If your property is in a shopping center or modern commercial complex, Minister of Trade Regulation No. 47/M-DAG/PER/6/2017 may apply. While notarization is not always required for lease extensions, having the document notarized by a Notary Public can provide additional legal protection and enforceability. Ensure all parties have legal capacity to enter contracts and that the extension complies with local zoning and building regulations.