Lease With Option To Buy Contract Template for Indonesia

The Lease with Option to Buy Contract is a sophisticated legal instrument used in Indonesian property transactions where parties wish to combine a lease arrangement with a future purchase opportunity. This document is particularly useful when potential buyers need time to arrange financing or want to occupy the property before committing to a purchase. It must comply with Indonesian property laws, including the Basic Agrarian Law and relevant regulations on foreign ownership. The agreement typically includes detailed provisions for both the lease period (covering rent, maintenance, and use restrictions) and the purchase option (including price, exercise period, and conditions). This contract type is commonly used in both residential and commercial contexts, requiring careful consideration of Indonesian property transfer regulations, tax implications, and ownership restrictions.

1. Parties: Identification of the lessor/potential seller and lessee/potential buyer, including complete legal names, addresses, and any registration numbers

2. Background: Context of the agreement, including brief property description and parties' intention for lease with purchase option

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

4. Property Details: Comprehensive description of the property, including address, certificate numbers, and boundaries

5. Lease Terms: Core lease provisions including duration, rent amount, payment schedule, and security deposit

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

7. Purchase Price and Payment: Agreed purchase price if option is exercised, payment terms, and treatment of lease payments towards purchase

8. Property Use and Maintenance: Rights and obligations regarding property use, maintenance responsibilities, and permitted modifications

9. Insurance and Risk: Requirements for property insurance and allocation of risk during lease period

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

11. Assignment and Subletting: Restrictions on transfer of lease or option rights

12. Notices: Process and requirements for formal communications between parties

13. Governing Law: Confirmation of Indonesian law application and jurisdiction

14. Execution: Signature blocks and execution requirements