A Letter Of Intent To Purchase (Real Estate) is a crucial preliminary document in Indonesian property transactions that bridges the gap between initial interest and a formal purchase agreement. It is typically used when a potential buyer has identified a property of interest and wishes to formally express their intent to purchase while establishing a framework for the transaction. The document includes key elements such as property details, proposed purchase price, due diligence period, and timeline for completion. Under Indonesian law, while most provisions are non-binding, certain aspects like confidentiality and exclusivity can be made binding. This document is particularly important in Indonesia's real estate market where property transactions often involve complex ownership structures and require careful consideration of various land rights categories under the Basic Agrarian Law.
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1. Date and Parties: Full legal names and addresses of both the potential buyer and current property owner
2. Property Details: Specific identification and description of the real estate property, including address, land certificate number, and property specifications
3. Purchase Price: Proposed purchase price and any preliminary terms regarding payment structure
4. Due Diligence Period: Specified timeframe for conducting property investigations and document verification
5. Transaction Timeline: Proposed schedule for completing the transaction, including key milestones
6. Confidentiality: Statement regarding the confidential nature of negotiations and shared information
7. Non-Binding Nature: Clear statement that the letter is non-binding except for specified clauses (such as confidentiality)
8. Exclusivity Period: Period during which the seller agrees not to negotiate with other potential buyers
9. Closing Statement: Formal closing including signature blocks for all parties
1. Deposit Terms: Include when an earnest money deposit is proposed as part of the transaction
2. Financing Contingency: Include when the purchase is dependent on the buyer securing specific financing
3. Property Access: Include when specific arrangements for property inspection or access during due diligence are needed
4. Existing Tenancies: Include when the property has current tenants and their rights need to be addressed
5. Special Conditions: Include when there are unique circumstances affecting the property or transaction
6. Foreign Ownership Structure: Include when the buyer is a foreign entity and specific ownership structure needs to be outlined
1. Property Description Schedule: Detailed description of the property including lot size, building specifications, and included fixtures
2. Preliminary Due Diligence Checklist: List of documents and verifications required during the due diligence period
3. Proposed Payment Schedule: Overview of the proposed payment structure and timing if involving multiple payments
Authors
Relevant legal definitions
Clauses
Relevant Industries
Real Estate
Property Development
Commercial Property
Residential Property
Hospitality
Retail
Industrial
Office Space
Agriculture (for land purchases)
Tourism
Relevant Teams
Legal
Real Estate
Corporate Development
Finance
Risk Management
Business Development
Property Management
Asset Management
Investment
Facilities Management
Relevant Roles
Real Estate Manager
Property Developer
Legal Counsel
Corporate Lawyer
Property Manager
Business Development Manager
Chief Financial Officer
Investment Manager
Real Estate Agent
Property Acquisition Manager
Facilities Manager
Asset Manager
Director of Real Estate
Corporate Real Estate Manager
Risk Manager
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