Lease With Option To Buy Commercial Property Template for Indonesia

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Key Requirements PROMPT example:

Lease With Option To Buy Commercial Property

"I need a Lease with Option to Buy Commercial Property agreement for a 3-story retail building in Jakarta, with a 5-year initial lease starting March 2025 and an option to purchase at market value plus 10% during the final year of the lease term, including provisions for subletting two floors."

Document background
The Lease With Option To Buy Commercial Property agreement is a sophisticated legal instrument used in Indonesian commercial real estate transactions where a tenant wishes to lease a property while maintaining the right to purchase it in the future. This document is particularly relevant when businesses want to test a location before committing to a purchase, or when they need time to arrange financing for an eventual acquisition. The agreement must comply with Indonesian property law, including the Basic Agrarian Law (Undang-Undang Pokok Agraria) and relevant commercial property regulations. It provides comprehensive coverage of both the lease and purchase aspects, including rental terms, maintenance obligations, option exercise procedures, and purchase price mechanisms. This type of agreement is commonly used in various commercial contexts, from retail locations to industrial facilities, and requires careful consideration of both immediate tenancy needs and long-term property ownership objectives.
Suggested Sections

1. Parties: Identification of the lessor/property owner and lessee/potential buyer, including complete legal names, addresses, and registration numbers for companies

2. Background: Context of the agreement, brief description of the property, and parties' intentions regarding lease and potential purchase

3. Definitions: Definitions of key terms used throughout the agreement, including Property, Lease Period, Option Period, Purchase Price, etc.

4. Property Details: Detailed description of the leased property, including address, boundaries, certificates, and permitted use

5. Lease Terms: Lease duration, rent amount, payment terms, security deposit, and other basic lease conditions

6. Option to Purchase: Terms of the purchase option, including option period, purchase price or price determination mechanism, and exercise procedure

7. Property Maintenance and Repairs: Responsibilities for maintenance, repairs, and improvements during the lease period

8. Insurance and Risk: Insurance requirements and allocation of risks during the lease period

9. Exercise of Option: Detailed procedure for exercising the purchase option, including notice requirements and completion timeframe

10. Representations and Warranties: Statements of fact and promises by both parties regarding their capacity, authority, and the property's condition

11. Default and Remedies: Events of default under both lease and option terms, and corresponding remedies

12. Termination: Circumstances and procedures for terminating the agreement

13. Governing Law and Dispute Resolution: Choice of law and dispute resolution mechanisms

Optional Sections

1. Property Management: Required for larger commercial properties with shared facilities or complex management requirements

2. Environmental Compliance: Necessary for properties where environmental regulations are significant considerations

3. Operating Expenses: Detailed breakdown of operating expenses and allocation between parties, necessary for triple net leases

4. Subletting and Assignment: Include when subletting or assignment rights are to be granted

5. Renovation and Improvement Rights: Required when significant modifications to the property are contemplated

6. Foreign Investment Provisions: Necessary when either party is a foreign entity, addressing compliance with Indonesian foreign investment laws

7. Transfer of Employees: Required when the property includes ongoing business operations with employees

8. Intellectual Property Rights: Necessary when the property includes business-specific fixtures or branding elements

Suggested Schedules

1. Property Description Schedule: Detailed technical description of the property, including floor plans, boundaries, and certificates

2. Rent Payment Schedule: Detailed breakdown of rent payments, including escalation rates and payment dates

3. Purchase Price Calculation: Formula or mechanism for determining the final purchase price, including adjustments

4. Condition Report: Detailed report on the condition of the property at lease commencement

5. Permitted Use Schedule: Detailed description of permitted commercial activities and use restrictions

6. Maintenance Schedule: Detailed breakdown of maintenance responsibilities and schedules

7. Required Licenses and Permits: List of necessary operational licenses and permits for the property

8. Insurance Requirements: Detailed specification of required insurance coverage

9. Property Handover Checklist: List of items and conditions for property handover at lease end or purchase completion

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

Retail

Office Space

Industrial

Hospitality

Healthcare

Education

Warehousing and Logistics

Manufacturing

Food and Beverage

Technology

Professional Services

Entertainment and Recreation

Relevant Teams

Legal

Finance

Real Estate

Operations

Facilities Management

Risk and Compliance

Business Development

Property Management

Asset Management

Investment

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Real Estate Director

Property Manager

Facilities Manager

Legal Counsel

Commercial Director

Operations Manager

Finance Manager

Business Development Manager

Risk Manager

Compliance Officer

Asset Manager

Investment Manager

Regional Director

Industries
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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