A Letter of Interest (Real Estate) is commonly used in Indonesian property transactions as an initial formal step before proceeding with more detailed negotiations and due diligence. This document is particularly important in the Indonesian real estate context, where property transactions are governed by multiple layers of regulation including the Basic Agrarian Law and regional property regulations. It serves to establish serious intent while maintaining flexibility, typically including proposed terms, timelines, and basic conditions of the potential transaction. The LOI is especially useful when dealing with high-value properties, foreign investment scenarios, or complex commercial real estate transactions where preliminary alignment of parties' expectations is crucial before incurring significant transaction costs.
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1. Letterhead and Date: Official letterhead of the interested party and date of the letter
2. Recipient Details: Full name and address of the property owner or their representative
3. Subject Line: Clear indication that this is a Letter of Interest for the specific property
4. Opening Statement: Introduction of the interested party and clear expression of interest in the property
5. Property Details: Specific description and address of the property of interest
6. Proposed Transaction Overview: Basic terms including proposed purchase price range or lease terms
7. Timeline: Proposed timeline for due diligence and transaction completion
8. Contact Information: Key contact person's details for further communication
9. Non-Binding Nature: Clear statement that this is a non-binding expression of interest
10. Closing and Signature: Professional closing, name and signature of authorized representative
1. Financing Statement: Include when financing arrangements need to be disclosed or discussed
2. Confidentiality Clause: Include when sensitive information will be exchanged during negotiations
3. Exclusivity Request: Include when requesting exclusive negotiation rights for a specific period
4. Special Conditions: Include when there are specific requirements or conditions for the transaction
5. Company Profile: Include when the interested party is not well-known to the recipient
6. Foreign Investment Details: Include when the interested party is a foreign entity
1. Property Description Schedule: Detailed description of the property including lot number, boundaries, and current usage
2. Preliminary Terms Sheet: Basic proposed terms and conditions for the potential transaction
3. Corporate Information: Company registration and financial capability evidence
4. Site Plans: Property maps, floor plans, or site layouts if available
5. Proof of Funds: Evidence of financial capability or financing commitment letters
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