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Letter Of Intent For Purchase Of Commercial Property Template for Indonesia

A Letter of Intent for Purchase of Commercial Property under Indonesian law serves as a preliminary document outlining the key terms and conditions for a proposed commercial property acquisition. This document, while generally non-binding except for specific provisions, establishes the framework for negotiation and subsequent preparation of the final purchase agreement. It addresses essential elements including property details, proposed purchase price, payment terms, and timeline, while incorporating considerations specific to Indonesian property law, including requirements under the Basic Agrarian Law (UUPA) and relevant foreign investment regulations where applicable.

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What is a Letter Of Intent For Purchase Of Commercial Property?

A Letter Of Intent For Purchase Of Commercial Property is a crucial preliminary document used in Indonesian commercial real estate transactions to establish the initial understanding between parties before proceeding with a formal purchase agreement. This document is typically employed when parties have reached a preliminary agreement on key commercial terms but need to formalize their intent before conducting detailed due diligence and drafting definitive agreements. It includes essential information such as property details, proposed purchase price, payment structure, and timeline, while acknowledging Indonesian legal requirements including property ownership restrictions, registration requirements, and foreign investment regulations where applicable. The document serves as a roadmap for the transaction while typically maintaining its non-binding nature except for specific provisions like confidentiality and exclusivity.

What sections should be included in a Letter Of Intent For Purchase Of Commercial Property?

1. Date and Parties: Full legal names and addresses of both the potential purchaser and property owner

2. Introduction/Background: Brief context of the parties' intentions and the purpose of the LOI

3. Property Description: Detailed description of the commercial property including address, land title details, and building specifications

4. Purchase Price: Proposed purchase price and any price adjustment mechanisms

5. Payment Terms: Outline of proposed payment structure, including deposits and payment schedules

6. Timeline: Proposed timeline for due diligence, definitive agreement, and closing

7. Key Commercial Terms: Essential business terms that will form the basis of the final purchase agreement

8. Non-Binding Nature: Clear statement that the LOI is non-binding except for specific provisions

9. Binding Provisions: Specific provisions that are intended to be binding (confidentiality, exclusivity, governing law)

10. Expiration: Validity period of the LOI and conditions for extension

What sections are optional to include in a Letter Of Intent For Purchase Of Commercial Property?

1. Due Diligence: Detailed requirements and process for due diligence investigation, used when specific investigation requirements need to be agreed upon

2. Exclusivity Period: Terms of exclusive negotiation period, included when seller agrees not to negotiate with other parties

3. Break Fee: Details of any break fee payable if either party withdraws, used in high-value transactions

4. Conditions Precedent: Specific conditions that must be met before proceeding with the transaction, included for complex transactions

5. Broker/Agent Provisions: Details of any broker involvement and commission arrangements, included when brokers are involved

6. Foreign Investment Provisions: Specific provisions related to foreign ownership requirements, included when purchaser is a foreign entity

7. Environmental Matters: Specific environmental investigation requirements or concerns, included for industrial properties or when environmental issues are known

What schedules should be included in a Letter Of Intent For Purchase Of Commercial Property?

1. Property Details Schedule: Detailed technical description of the property including lot number, certificate details, and exact measurements

2. Price Calculation Schedule: Detailed breakdown of the purchase price components and calculation methodology

3. Due Diligence Checklist: List of required documents and investigations for the due diligence process

4. Timeline Schedule: Detailed timeline with specific milestones and deadlines

5. Required Permits Schedule: List of permits and licenses required for the transaction and property use

6. Property Plans: Site plans, floor plans, and other relevant property drawings

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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