Non Disturbance Agreement Template for Indonesia

The Non-Disturbance Agreement serves as a crucial document in Indonesian commercial real estate transactions where property is used as collateral for financing. It becomes particularly relevant when a landlord obtains or has obtained financing secured by the property that is or will be leased to tenants. The agreement ensures that if the landlord defaults on their loan and the lender forecloses, the tenant's lease rights will be preserved, providing security for their continued occupancy. Under Indonesian law, this document must comply with the Civil Code (KUHPerdata) and property regulations, requiring proper notarization and potentially registration with relevant authorities. The agreement typically includes detailed provisions about the property, lease terms, and lender's rights, while establishing clear procedures for notice and enforcement under Indonesian jurisdiction.

1. Parties: Identifies and defines all parties to the agreement - typically the Landlord, Tenant, and Lender

2. Background: Recitals explaining the lease arrangement, the loan/security arrangement, and the purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement, including Property, Lease, Mortgage, Security Interest

4. Non-Disturbance Covenant: Core provision where Lender agrees not to disturb Tenant's possession upon foreclosure or enforcement of security

5. Attornment: Tenant's agreement to recognize Lender as landlord in case of foreclosure

6. Subordination: Establishes priority of the Mortgage over the Lease if applicable

7. Lender Protections: Provisions protecting Lender from existing landlord liabilities and modifications to lease

8. Notice Requirements: Procedures for serving notices between all parties

9. Term and Termination: Duration of the agreement and circumstances for termination

10. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and establishes jurisdiction for disputes

11. Execution: Signature blocks for all parties and notarization requirements under Indonesian law