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Hotel Purchase Agreement Template for Indonesia

A Hotel Purchase Agreement under Indonesian law is a comprehensive legal document that governs the sale and purchase of hotel properties in Indonesia. It addresses both the transfer of real estate assets and the operational aspects of the hotel business, complying with Indonesian property laws, tourism regulations, and investment requirements. The agreement covers crucial elements including property transfer, asset inventory, employee transitions, operational licenses, and regulatory compliance, while considering specific Indonesian legal requirements such as land title restrictions, foreign ownership limitations, and local business regulations. The document must be prepared in accordance with Indonesian Civil Code principles and relevant sector-specific legislation.

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What is a Hotel Purchase Agreement?

The Hotel Purchase Agreement is a crucial document used in Indonesia when transferring ownership of hotel properties, whether they are standalone hotels, resort properties, or part of larger commercial developments. This agreement is essential for transactions in Indonesia's growing hospitality sector, where specific regulatory requirements must be met, including compliance with the Basic Agrarian Law, Investment Law, and Tourism Law. The document covers all aspects of the transaction, from property transfer to operational considerations, and must be structured to address unique aspects of Indonesian property law, including land title restrictions and foreign ownership limitations. It's particularly important to note that Hotel Purchase Agreements in Indonesia often require additional consideration of regional regulations and specific permits depending on the hotel's location and classification.

What sections should be included in a Hotel Purchase Agreement?

1. Parties: Identification of the seller and purchaser, including complete legal names and addresses

2. Background: Context of the transaction, brief description of the hotel property, and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement, including Property, Completion Date, Purchase Price, etc.

4. Sale and Purchase: Core agreement for the sale and purchase of the hotel, including the property and associated assets

5. Purchase Price: Details of the purchase price, payment terms, deposits, and adjustment mechanisms

6. Conditions Precedent: Conditions that must be satisfied before completion, including regulatory approvals and due diligence

7. Pre-Completion Obligations: Obligations of both parties between signing and completion, including operation of the hotel business

8. Completion: Process and requirements for closing the transaction, including deliverables and timing

9. Representations and Warranties: Statements of fact and assurances from both parties about the hotel, business, and their authority

10. Employee Matters: Arrangements for existing hotel employees and related liabilities

11. Tax Matters: Allocation of tax liabilities and responsibilities

12. Indemnification: Provisions for compensation in case of breach or third-party claims

13. Termination: Circumstances under which the agreement can be terminated and consequences

14. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignments

What sections are optional to include in a Hotel Purchase Agreement?

1. Brand and Management Agreements: Required if the hotel operates under a brand or management agreement that needs to be transferred or terminated

2. Environmental Matters: Detailed section needed if environmental issues are identified during due diligence

3. Intellectual Property: Required if significant IP assets are involved in the transaction

4. Financing Provisions: Needed if the purchase involves specific financing arrangements or conditions

5. Asset Transfer: Detailed section required if the deal includes significant movable assets or inventory

6. Transition Services: Required if the seller will provide post-completion operational support

7. Data Protection: Needed if significant customer or employee data is being transferred

8. Force Majeure: Optional expanded section for specific risk allocation in uncertain circumstances

What schedules should be included in a Hotel Purchase Agreement?

1. Property Description: Detailed legal description of the hotel property and land

2. Asset Inventory: Comprehensive list of FF&E, operating equipment, and other tangible assets

3. Excluded Assets: List of assets specifically excluded from the sale

4. Employee Information: Details of existing employees, their positions, and employment terms

5. Contracts and Agreements: List of existing contracts, licenses, and agreements affecting the hotel

6. Required Permits: List of operating permits and licenses required for hotel operation

7. Form of Transfer Instruments: Templates for deed of transfer and other transfer documents

8. Purchase Price Adjustments: Detailed mechanisms for adjusting the purchase price

9. Completion Checklist: List of all documents and actions required for completion

10. Warranties: Detailed warranties relating to the property and business

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Cost

Free to use

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