Lien Release Letter

Lien Release Letter Template for Indonesia

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"Need to draft a Lien Release Letter under Indonesian law for releasing a mortgage on a commercial property in Jakarta, where PT Bank Sentosa will release its security interest following full payment of the loan on March 15, 2025."

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What is a Lien Release Letter?

A Lien Release Letter is essential in Indonesian business and financial transactions where secured interests need to be formally terminated. This document is required when a debt or obligation secured by a lien has been fully satisfied, or when parties agree to release the security interest for other reasons. The letter must comply with Indonesian law, particularly the Civil Code (KUHPerdata), Law No. 4 of 1996 on Land Mortgages, and Law No. 42 of 1999 on Fiduciary Security. It typically includes specific details about the original lien, the secured assets, and clear release language. The document is crucial for clearing title records and enabling assets to be transferred or used as security for new transactions.

What sections should be included in a Lien Release Letter?

1. Letter Header: Official letterhead, date, and reference number of the letter

2. Recipient Details: Complete name and address of the recipient (debtor or debtor's representative)

3. Subject Line: Clear indication that this is a Lien Release Letter with reference to the original lien

4. Lien Identification: Details of the original lien including registration numbers, date of creation, and secured assets

5. Release Declaration: Formal statement releasing the lien and confirming full satisfaction of the underlying obligation

6. Authorization Statement: Confirmation of the lienholder's authority to release the lien

7. Effective Date: Specification of when the release takes effect

8. Signature Block: Signature, name, and title of authorized representative of the lienholder

What sections are optional to include in a Lien Release Letter?

1. Partial Release Statement: Used when only part of the secured assets are being released from the lien

2. Registration Instructions: Include when specific actions are required to register the release with government authorities

3. Multiple Lienholder Acknowledgment: Required when there are multiple lienholders and their interests need to be addressed

4. Conditions Precedent: Include if the release is subject to certain conditions being met

5. Governing Law Statement: Optional statement confirming Indonesian law governs the release, particularly useful in international transactions

What schedules should be included in a Lien Release Letter?

1. Original Lien Documentation: Copy of the original lien or security agreement being released

2. Proof of Debt Settlement: Evidence that the underlying obligation has been satisfied

3. Corporate Authority Documentation: Evidence of the signatory's authority to execute the release

4. Asset Description: Detailed description of the assets being released, particularly important for partial releases

5. Registration Certificates: Copies of relevant registration certificates for the original lien

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

alex.den.21@genieai.co

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Title And Lien Release

An Indonesian law-governed document that releases security interests over property and confirms clear title transfer, subject to local property and security regulations.

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What is a Lien Release Letter?

What sections should be included in a Lien Release Letter?

What sections are optional to include in a Lien Release Letter?

What schedules should be included in a Lien Release Letter?

Authors

Alex Denne

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