Rental Purchase Agreement Template for Indonesia

The Rental Purchase Agreement is a sophisticated legal instrument used in Indonesia when parties wish to combine the benefits of both rental and purchase arrangements. This document type is particularly relevant when the potential purchaser prefers or requires a period of rental before committing to full ownership, or when spreading the cost of acquisition over time is advantageous. The agreement must comply with Indonesian Civil Code (KUHPerdata), consumer protection laws, and financial regulations, making it suitable for various assets from industrial equipment to commercial property. It typically includes detailed provisions for maintenance, insurance, payment schedules, and the conditions under which the purchase option can be exercised. The document is especially valuable in business contexts where testing or utilizing an asset before full commitment to purchase is desired, or where tax and accounting considerations make a rental-to-purchase structure more advantageous than an immediate purchase.

1. Parties: Identification of the lessor and lessee, including complete legal names, addresses, and any registration numbers for companies

2. Background: Context of the agreement, including brief description of the asset and the intention to enter into a rental purchase arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Asset', 'Rental Period', 'Purchase Option', 'Rental Payments', etc.

4. Asset Description: Detailed description of the asset(s) subject to the rental purchase agreement, including specifications, condition, and serial numbers

5. Term and Rental Period: Duration of the agreement, commencement date, and conditions for renewal or termination

6. Rental Payments: Payment terms, including amount, frequency, method of payment, and consequences of late payment

7. Purchase Option: Terms and conditions for exercising the purchase option, including purchase price calculation and process

8. Title and Ownership: Clarification of ownership status during rental period and conditions for transfer of title

9. Maintenance and Repairs: Responsibilities for maintenance, repairs, and upkeep of the asset during the rental period

10. Insurance and Risk: Requirements for insurance coverage and allocation of risk during the rental period

11. Default and Termination: Events of default, remedies, and termination procedures

12. Return of Asset: Conditions and procedures for return of asset if purchase option is not exercised

13. Governing Law: Specification of Indonesian law as governing law and jurisdiction for disputes

14. General Provisions: Standard contractual provisions including notices, amendments, and severability