Option Agreement (Real Estate) Template for Indonesia

The Option Agreement (Real Estate) is a crucial document in Indonesian property transactions, used when a party wishes to secure the right to purchase or lease real estate without immediate commitment to the full transaction. This agreement is particularly valuable in complex commercial real estate deals where buyers need time for due diligence, financing arrangements, or regulatory approvals. The document must conform to Indonesian legal requirements, including the Civil Code (KUHPerdata) and Basic Agrarian Law, especially regarding land rights and property transfer regulations. It typically includes comprehensive details about the property, option period, exercise price, and conditions, while accounting for specific Indonesian requirements such as foreign ownership restrictions and mandatory notarial involvement. The agreement provides protection for both the option holder's interests in securing the property and the grantor's rights regarding property disposition.

1. Parties: Identification of the Option Grantor and Option Holder, including complete legal names, addresses, and registration details if companies

2. Background: Context of the agreement, relationship between parties, and brief description of the property subject to the option

3. Definitions: Definitions of key terms used throughout the agreement, including Property, Option Period, Option Fee, Purchase Price, and Exercise Notice

4. Grant of Option: Clear statement of the exclusive option right being granted, including the specific property details and type of right (purchase, lease, etc.)

5. Option Period: Specification of the duration of the option, including start and end dates, and any conditions for extension

6. Option Fee: Details of the option fee, payment terms, whether refundable or non-refundable, and if it will be applied to the purchase price

7. Exercise of Option: Process and requirements for exercising the option, including notice requirements and form of exercise notice

8. Purchase Price: Specification of the purchase price or calculation method, payment terms, and any adjustments

9. Property Condition: Representations regarding the current condition of the property and any warranties

10. Title and Ownership: Confirmation of clear title and authority to sell, including any encumbrances or restrictions

11. Completion: Process and requirements for completing the sale after option exercise

12. Default and Termination: Consequences of default by either party and circumstances for termination

13. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms

14. Notices: Process for giving and receiving formal notices under the agreement

15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability