A Letter of Intent for Lease Agreement is commonly used in Indonesian business practice as a preliminary step before entering into a formal lease agreement. This document is particularly important in the Indonesian context where property transactions often involve complex regulatory requirements and multiple stakeholders. It serves to memorialize the basic terms and conditions agreed upon between parties, typically including proposed rental rates, lease duration, and key commercial terms. While primarily non-binding, certain provisions such as confidentiality and exclusivity can be made legally binding under Indonesian law. The document helps manage expectations and provides a clear roadmap for lease negotiations, especially important when dealing with commercial properties or when foreign entities are involved, as additional regulatory considerations may apply under Indonesian investment laws.
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1. Date and Parties: Full names and details of the prospective landlord and tenant, including their registered addresses and company registration numbers if applicable
2. Background/Recitals: Brief context explaining the parties' intentions to enter into a lease agreement and the purpose of this LOI
3. Definitions: Key terms used throughout the document that require clear definition
4. Property Details: Specific description and address of the property to be leased, including its size and any relevant features
5. Key Commercial Terms: Essential lease terms including proposed rent, lease duration, and payment terms
6. Timeline: Proposed timeline for lease negotiation, documentation, and commencement
7. Conditions Precedent: Any conditions that must be satisfied before proceeding with the final lease agreement
8. Binding/Non-binding Provisions: Clear statement of which provisions are intended to be legally binding and which are not
9. Confidentiality: Terms regarding the confidential treatment of negotiations and shared information
10. Exclusivity: Period during which the landlord will not negotiate with other potential tenants
11. Governing Law: Statement that the LOI is governed by Indonesian law
12. Signatures: Execution block for both parties
1. Due Diligence: Terms regarding the tenant's right to conduct property inspections and review documentation - include when significant due diligence is required
2. Deposit Terms: Details of any initial deposit or earnest money - include when early commitment payments are required
3. Broker/Agent Details: Information about any involved real estate brokers or agents - include when third-party agents are involved
4. Break Clause: Conditions under which either party can terminate negotiations - include for complex or long-term negotiations
5. Cost Allocation: How costs related to the negotiation and documentation will be shared - include when significant costs are anticipated
1. Property Plan: Floor plan or site plan of the property to be leased
2. Initial Terms Sheet: Summary of key commercial terms agreed in principle
3. Due Diligence Requirements: List of documents and information to be provided for due diligence
4. Timeline Schedule: Detailed timeline for negotiation, documentation, and completion phases
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