Owner Finance Real Estate Contract Template for Indonesia

The Owner Finance Real Estate Contract serves as a crucial legal instrument in Indonesian property transactions where traditional bank financing is either not preferred or not available. This document type is particularly relevant when property owners wish to sell their real estate while acting as the financier, effectively combining a sale agreement with a financing arrangement. It must comply with Indonesian property law, including the Basic Agrarian Law and relevant financial regulations, while providing clear terms for both the property transfer and payment obligations. The agreement typically includes detailed provisions for property description, payment schedules, security arrangements, and eventual transfer of title, all structured to protect both parties' interests under Indonesian jurisdiction. This contract type is especially useful for transactions involving private sellers, property developers, or investors who prefer direct financing arrangements, and must be executed before a licensed Indonesian land deed official (PPAT).

1. Parties: Identification of the Property Owner/Seller (Financier) and the Buyer, including complete legal names, addresses, and ID numbers as required by Indonesian law

2. Background: Context of the transaction, including brief property description and parties' intention to enter into owner-financing arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including technical, financial, and legal terms

4. Property Details: Comprehensive description of the property, including certificate number, land area, building specifications, and boundaries as per Indonesian land registry requirements

5. Purchase Price and Payment Terms: Total purchase price, down payment, financing amount, interest rate, payment schedule, and payment methods

6. Security Arrangements: Details of property title retention, mortgage rights (Hak Tanggungan), and other security measures until full payment

7. Payment Default and Remedies: Consequences of payment default, grace periods, and legal remedies available to both parties

8. Property Handover: Terms and conditions for initial property possession and final transfer of ownership

9. Insurance and Maintenance: Requirements for property insurance and maintenance responsibilities during the financing period

10. Representations and Warranties: Legal statements and guarantees from both parties regarding property ownership, condition, and capacity to enter agreement

11. Governing Law and Dispute Resolution: Applicable Indonesian law and agreed methods for dispute resolution

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

13. Execution: Signature blocks and notarization requirements as per Indonesian law