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Lease Settlement Agreement for Indonesia

Lease Settlement Agreement Template for Indonesia

A legally binding document governed by Indonesian law that formalizes the resolution of disputes or early termination of a lease agreement between a lessor and lessee. This agreement outlines the terms of settlement, including financial obligations, property handover conditions, mutual releases, and other specific arrangements agreed upon by the parties. It incorporates relevant provisions from the Indonesian Civil Code (KUHPerdata) and applicable property laws, ensuring compliance with local regulations while providing a clear framework for concluding the lease relationship.

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What is a Lease Settlement Agreement?

The Lease Settlement Agreement is a crucial document used in Indonesian property law contexts when parties need to formally resolve disputes arising from a lease arrangement or mutually agree to terminate a lease before its scheduled end date. This document becomes necessary when issues such as payment defaults, property damage disputes, or changes in business circumstances require a structured resolution. The agreement must comply with Indonesian Civil Code requirements and relevant property regulations, particularly considering the unique aspects of Indonesian property rights under the Basic Agrarian Law. A properly drafted Lease Settlement Agreement helps prevent future litigation by clearly documenting the terms of settlement, including financial settlements, property restoration requirements, and mutual releases from future claims.

What sections should be included in a Lease Settlement Agreement?

1. Parties: Identification of the lessor, lessee, and any other relevant parties to the settlement

2. Background: Recitals describing the original lease agreement, the arising disputes or issues, and the parties' intention to settle

3. Definitions: Definitions of key terms used throughout the agreement

4. Settlement Terms: Core terms of the settlement including any payments, releases, or actions required

5. Release and Discharge: Mutual releases from claims related to the lease and dispute

6. Handover Provisions: Terms governing the inspection, repair, and return of the leased premises

7. Payment Terms: Details of any settlement payments, refunds, or adjustments to be made

8. Confidentiality: Obligations regarding confidentiality of the settlement terms

9. Representations and Warranties: Statements of fact and assurances by both parties

10. Governing Law: Specification of Indonesian law as governing law and jurisdiction

11. Execution: Signing provisions and formal requirements under Indonesian law

What sections are optional to include in a Lease Settlement Agreement?

1. Third Party Claims: Required when there are potential claims from third parties that need to be addressed

2. Litigation Discontinuance: Needed when there is ongoing litigation that needs to be terminated

3. Tax Provisions: Required when there are specific tax implications that need to be addressed

4. Insurance Claims: Needed when there are outstanding insurance claims related to the property

5. Broker Provisions: Required when property brokers are involved and their fees need to be addressed

6. Environmental Matters: Needed when there are environmental issues or liabilities to be settled

7. Assignment: Required when either party needs to assign rights or obligations under the settlement

What schedules should be included in a Lease Settlement Agreement?

1. Schedule 1 - Property Details: Detailed description of the leased property including address and specifications

2. Schedule 2 - Original Lease Agreement: Copy or key terms of the original lease agreement being settled

3. Schedule 3 - Settlement Payment Schedule: Detailed breakdown of any settlement payments, including amounts and timing

4. Schedule 4 - Property Condition Report: Current condition of the property and any required repairs or restoration

5. Schedule 5 - Outstanding Claims: List of all claims being settled under the agreement

6. Appendix A - Handover Checklist: Checklist for property inspection and handover process

7. Appendix B - Required Documents: List of documents to be exchanged or executed as part of the settlement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions



































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Relevant Industries

Commercial Real Estate

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Legal

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Relevant Roles

Property Manager

Legal Counsel

Real Estate Director

Facilities Manager

Corporate Lawyer

Operations Director

Chief Financial Officer

Asset Manager

Compliance Officer

Real Estate Administrator

Leasing Manager

Property Administrator

Risk Manager

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