Mortgage Agreement Template for Indonesia

The Mortgage Agreement (Perjanjian Hak Tanggungan) is a crucial document in Indonesian property financing, used when a borrower seeks to obtain a loan using real property as collateral. This document is essential for both residential and commercial property transactions in Indonesia, creating a legally enforceable security interest under Law No. 4 of 1996 on Land Mortgage. The agreement must comply with strict formal requirements, including execution before a Land Deed Official (PPAT) and registration with the National Land Office. It is commonly used by banks, financial institutions, and property developers, containing detailed provisions about the mortgaged property, loan terms, borrower obligations, and enforcement mechanisms. The document plays a vital role in Indonesia's property financing system, providing security for lenders while ensuring borrowers' rights are protected under local law.

1. Parties: Identification of the lender (mortgagee) and borrower (mortgagor), including their complete legal names, addresses, and registration details if companies

2. Background: Context of the mortgage agreement, including reference to any facility agreement or loan agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Details: Specification of the loan amount, interest rate, term, and purpose of the loan

5. Property Details: Detailed description of the mortgaged property, including certificate numbers and registration details

6. Grant of Mortgage: Legal language creating the mortgage (Hak Tanggungan) over the property

7. Representations and Warranties: Statements of fact and assurances given by the borrower regarding their authority, property ownership, and legal status

8. Borrower's Covenants: Ongoing obligations of the borrower including property maintenance, insurance, and payment obligations

9. Events of Default: Circumstances that constitute default and trigger enforcement rights

10. Enforcement Rights: Lender's rights and remedies in case of default, including power of sale

11. Insurance: Requirements for property insurance and assignment of insurance proceeds

12. Registration and Costs: Provisions regarding mortgage registration and allocation of costs

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

14. Governing Law and Jurisdiction: Confirmation of Indonesian law as governing law and jurisdiction for disputes