The Long Term Lease Agreement is a vital legal instrument used in Indonesia for establishing extended property leasing arrangements, typically spanning several years. This document is essential when parties seek to create a stable, long-term leasing relationship with clearly defined rights and obligations. It must comply with Indonesian property law, including the Basic Agrarian Law and relevant regional regulations. The agreement is particularly important for businesses requiring secure, long-term property rights and is commonly used in commercial, industrial, and large-scale residential projects. Special considerations are included when foreign entities are involved, as Indonesian law has specific requirements regarding foreign property rights. The document covers crucial aspects such as lease terms, payment structures, maintenance responsibilities, and dispute resolution mechanisms, all within the framework of Indonesian legal requirements.
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1. Parties: Identification of the lessor and lessee with complete legal names, addresses, and registration details if companies
2. Background: Context of the lease agreement, including brief description of the property and parties' intention to enter into a long-term lease arrangement
3. Definitions: Detailed definitions of key terms used throughout the agreement
4. Property Details: Comprehensive description of the leased property, including address, boundaries, and certificate details
5. Lease Term: Duration of the lease, commencement date, and any renewal options
6. Rent and Payment Terms: Rental amount, payment schedule, security deposit, and payment methods
7. Rights and Obligations of the Lessor: Detailed listing of the property owner's responsibilities and rights
8. Rights and Obligations of the Lessee: Detailed listing of the tenant's responsibilities and rights
9. Permitted Use: Specified purposes for which the property may be used
10. Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements
11. Insurance: Required insurance coverage and responsibilities
12. Default and Remedies: Events of default and corresponding remedies available to either party
13. Termination: Conditions and procedures for early termination
14. Governing Law: Specification of Indonesian law as governing law and relevant jurisdictions
15. Dispute Resolution: Procedures for resolving disputes, including mediation and arbitration provisions
16. Notices: Methods and addresses for formal communications between parties
17. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments
1. Foreign Investment Provisions: Required when lessee is a foreign entity, addressing specific requirements under Indonesian investment laws
2. Fit-out Works: Used when the property requires significant modifications or improvements before or during occupancy
3. Operating Expenses: Detailed when there are shared facilities or complex service charge arrangements
4. Subletting and Assignment: Include when subletting or assignment rights are to be granted
5. Force Majeure: Detailed provisions for unforeseen circumstances, particularly relevant in long-term arrangements
6. Environmental Compliance: Required for industrial or commercial properties with potential environmental impacts
7. Change in Law Provisions: Important for very long-term leases to address regulatory changes
8. Bank Guarantee: When additional security beyond standard deposit is required
1. Property Details Schedule: Detailed technical description of the property, including floor plans and certificates
2. Rent Schedule: Detailed breakdown of rent calculations, escalations, and payment schedules
3. Condition Report: Detailed assessment of property condition at commencement of lease
4. Permitted Alterations: Specifications of allowed modifications to the property
5. Service Charges Schedule: Breakdown of additional charges, maintenance fees, and utilities
6. Insurance Requirements: Detailed specifications of required insurance coverage
7. Handover Protocol: Procedures and requirements for property handover at start and end of lease
8. Building Rules and Regulations: If applicable, specific rules governing the use of the property or building
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