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The Land Purchase Option Agreement is a crucial document in Indonesian real estate transactions, providing potential buyers with secured rights to purchase property while conducting necessary due diligence and arranging financing. It's particularly valuable in complex land acquisitions where buyers need time to assess the property's development potential, obtain permits, or arrange funding. The agreement must navigate Indonesian property law requirements, including the Basic Agrarian Law, land registration regulations, and foreign investment restrictions. It's commonly used in commercial, industrial, and agricultural land transactions, offering protection to both the option holder and the property owner by clearly defining the terms, conditions, and timeframes for the potential purchase. The document typically includes comprehensive details about the property, option exercise mechanisms, purchase price, and completion requirements, while ensuring compliance with local legal and regulatory frameworks.

1. Parties: Identification of the Option Grantor (landowner) and Option Holder, including their complete legal names, addresses, and any relevant registration numbers

2. Background: Context of the agreement, including brief description of the property and parties' intention to enter into an option arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including Property, Option Period, Option Fee, Purchase Price, and Completion Date

4. Grant of Option: Terms of the option grant, including exclusivity and the right to purchase the property within the specified period

5. Option Period: Duration of the option, including start and end dates, and any extension provisions

6. Option Fee: Amount of the option fee, payment terms, and whether it's refundable or applied to the purchase price

7. Exercise of Option: Process and requirements for exercising the option, including notice requirements and form of exercise notice

8. Purchase Price: Agreed purchase price for the property and payment terms if option is exercised

9. Property Details: Detailed description of the land, including certificate numbers, boundaries, and existing encumbrances

10. Conditions Precedent: Conditions that must be satisfied before the option can be exercised or the sale completed

11. Representations and Warranties: Statements and guarantees by both parties regarding their authority, property condition, and legal status

12. Completion: Process and requirements for completing the sale if the option is exercised

13. Default and Termination: Consequences of default and circumstances under which the agreement may be terminated

14. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms

15. Notices: Process and requirements for giving formal notices under the agreement

16. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability