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Owner Builder Agreement for Indonesia

Owner Builder Agreement Template for Indonesia

An Owner Builder Agreement under Indonesian law is a comprehensive legal document that establishes the rights, responsibilities, and obligations of an owner who acts as their own builder or construction manager. The agreement, governed by Indonesian construction laws including Law No. 2 of 2017 on Construction Services, outlines project specifications, safety requirements, regulatory compliance, and risk allocation. It includes provisions for permits, particularly the Building Permit (IMB), construction standards, quality control, and dispute resolution mechanisms, all while ensuring compliance with local building regulations and the Indonesian Civil Code.

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What is a Owner Builder Agreement?

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.

What sections should be included in a Owner Builder Agreement?

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

What sections are optional to include in a Owner Builder Agreement?

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

What schedules should be included in a Owner Builder Agreement?

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

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Genie AI

Cost

Free to use
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

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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