The Owner Builder Agreement is a crucial document in Indonesian construction projects where the property owner takes on the role of the builder or construction manager. This arrangement, while offering greater control and potential cost savings, requires careful legal structuring to ensure compliance with Indonesian construction laws and regulations. The agreement becomes necessary when property owners decide to manage their construction projects directly, rather than engaging a general contractor. It addresses essential aspects such as building permits (IMB), construction standards, safety requirements, and risk management, while ensuring compliance with Law No. 2 of 2017 on Construction Services and related regulations. The document serves as a comprehensive framework for managing relationships with contractors, suppliers, and regulatory authorities, while protecting the interests of all parties involved in the construction process.
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1. Parties: Identification of the Owner-Builder and any other primary parties to the agreement
2. Background: Context of the construction project, including property details and purpose of the agreement
3. Definitions: Key terms used throughout the agreement, including technical construction terms and legal definitions
4. Scope of Work: Detailed description of the construction project, including specifications and requirements
5. Permits and Approvals: Responsibilities for obtaining necessary permits, including IMB (Building Permit) and other regulatory approvals
6. Project Timeline: Construction schedule, milestones, and completion dates
7. Financial Terms: Budget, payment terms, and cost management procedures
8. Materials and Equipment: Specifications for materials, procurement responsibilities, and quality standards
9. Construction Standards: Required building standards, quality requirements, and compliance with Indonesian regulations
10. Safety and Security: Safety protocols, site security, and workplace health requirements
11. Insurance and Liability: Required insurance coverage and allocation of risks
12. Warranties and Defects: Warranty periods, defect liability, and rectification procedures
13. Dispute Resolution: Process for handling disputes, including mediation and arbitration procedures
14. Termination: Conditions and procedures for contract termination
15. General Provisions: Standard legal provisions including notices, governing law, and entire agreement clause
1. Environmental Management: Required when the project has significant environmental impacts or requires specific environmental permits
2. Subcontractor Management: Include when the owner-builder plans to engage subcontractors
3. Design Responsibilities: Required when the agreement includes design services or modifications
4. Cultural Heritage Protection: Include when construction is near cultural heritage sites or protected areas
5. Community Relations: Necessary for projects in densely populated areas or with community impact
6. Force Majeure: Detailed force majeure provisions for areas prone to natural disasters or specific risks
1. Schedule 1 - Project Specifications: Detailed technical specifications and drawings
2. Schedule 2 - Project Timeline: Detailed construction schedule with milestones
3. Schedule 3 - Cost Breakdown: Itemized budget and payment schedule
4. Schedule 4 - Required Permits: List of required permits and responsible parties
5. Schedule 5 - Insurance Requirements: Detailed insurance specifications and coverage requirements
6. Schedule 6 - Quality Assurance Plan: Quality control procedures and inspection requirements
7. Appendix A - Site Plan: Detailed site plans and drawings
8. Appendix B - Material Specifications: Detailed specifications for construction materials
9. Appendix C - Safety Procedures: Workplace safety protocols and emergency procedures
Authors
Relevant legal definitions
Clauses
Relevant Industries
Construction
Real Estate Development
Property Management
Architecture
Engineering
Building Materials
Infrastructure Development
Residential Construction
Commercial Construction
Industrial Construction
Relevant Teams
Legal
Construction Management
Project Management
Risk Management
Procurement
Quality Assurance
Health and Safety
Operations
Property Development
Contracts Administration
Relevant Roles
Property Owner
Construction Manager
Project Manager
Site Supervisor
Contract Administrator
Legal Counsel
Risk Manager
Procurement Manager
Quality Control Manager
Safety Officer
Building Inspector
Architect
Civil Engineer
Quantity Surveyor
Construction Consultant
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