Document background
A Letter of Intent to Sell Land is commonly used in Indonesian real estate transactions as a preliminary step before entering into a binding Sale and Purchase Agreement. This document is particularly important in Indonesia due to the complex nature of land rights and ownership regulations under the Basic Agrarian Law (UUPA). It serves to document the serious intention of both parties to enter into a land sale transaction while allowing time for due diligence, land verification, and compliance checks with local regulations. The document typically includes essential details about the land, proposed purchase price, timeline for completion, and any conditions precedent. While not binding for the main transaction, it may create certain obligations such as exclusivity or confidentiality. It's particularly crucial when dealing with different types of land titles (Hak atas Tanah) and when foreign investment is involved, as Indonesian law has specific restrictions on foreign land ownership.
