Real Estate Contract Template for Indonesia

A Real Estate Contract is a legally binding agreement that governs property transactions in Indonesia, establishing the terms and conditions for the sale and transfer of real estate between parties. Under Indonesian law, this document must comply with the Basic Agrarian Law and Civil Code requirements to ensure the transaction is legally valid and enforceable.

When do you need this document?

You need a Real Estate Contract whenever you're buying or selling property in Indonesia, whether it's residential homes, commercial buildings, or land parcels. This document is essential when transferring property ownership from a developer to a buyer, conducting secondary market property sales, or engaging in commercial real estate transactions. The contract is particularly crucial when dealing with different types of land certificates such as Hak Milik (freehold), Hak Guna Bangunan (building rights), or Hak Pakai (right to use), as each requires specific legal considerations. Foreign buyers purchasing property through permitted ownership structures also require this contract to document their legal rights and compliance with Indonesian foreign ownership regulations.

Key legal considerations

The contract must clearly identify all parties with complete legal information including citizenship status, as this affects property ownership rights under Indonesian law. Property description requirements are stringent, demanding precise details including certificate numbers, exact measurements, and boundary specifications as registered with the National Land Agency (BPN). Payment terms should specify the total purchase price, payment schedule, and consequences for default, while also addressing any applicable taxes and fees. The agreement must include provisions for due diligence periods, allowing buyers to verify property title, conduct inspections, and confirm legal compliance. Risk allocation clauses should address potential issues such as title defects, encumbrances, or regulatory changes that could affect the transaction.

Legal requirements in Indonesia

Indonesian law mandates that property transfers be conducted through a licensed Land Deed Official (PPAT) who will prepare the official deed of sale and purchase. The contract must comply with Government Regulation No. 24 of 1997 on Land Registration and incorporate requirements from Law No. 5 of 1960 regarding land rights. For apartment transactions, compliance with Law No. 20 of 2011 on Apartments is mandatory, including strata title considerations. Foreign ownership must adhere to Government Regulation No. 103 of 2015, which restricts foreign property ownership to specific types and locations. The document should reference applicable building permits and compliance with Law No. 28 of 2002 on Buildings. All parties must provide valid identification, and the contract requires proper witnessing according to Indonesian Civil Code provisions to ensure enforceability in Indonesian courts.