A Mutual Lease Termination Agreement is essential when both landlord and tenant agree to end a lease arrangement before its scheduled expiration. This document, governed by Indonesian law and particularly the Civil Code (KUHPerdata), provides a formal framework for documenting the consensual termination of lease obligations. It's commonly used when circumstances change for either party, such as business relocations, property sales, or mutual agreement to end the tenancy early. The agreement typically includes detailed provisions for property handover, financial settlements, and mutual releases, ensuring a clear and legally compliant termination process. It's particularly important in Indonesia where formal documentation of property-related transactions is crucial for legal certainty and future reference.
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1. Parties: Identification of the Landlord and Tenant, including their full legal names, addresses, and any registration numbers for companies
2. Background: Brief recital of the existing lease agreement details (date, property, term) and statement that parties wish to mutually terminate
3. Definitions: Key terms used in the agreement including 'Lease Agreement', 'Property', 'Termination Date', and 'Settlement Amount'
4. Termination: Clear statement of mutual agreement to terminate the lease and the effective termination date
5. Property Handover: Terms and conditions for returning the property, including inspection requirements and condition standards
6. Financial Settlement: Settlement of all financial obligations including rent, utilities, and other charges up to termination date
7. Release and Waiver: Mutual release from future obligations and claims related to the lease
8. Governing Law: Specification that Indonesian law governs the agreement
9. Execution: Signature blocks for all parties and witnesses
1. Security Deposit: Terms for return or forfeiture of security deposit - include if a security deposit exists
2. Outstanding Repairs: Allocation of responsibility for any necessary repairs - include if property requires repairs
3. Dispute Resolution: Procedure for resolving any disputes - include if parties want specific dispute resolution mechanisms
4. Confidentiality: Terms regarding confidentiality of termination terms - include if parties require privacy
5. Surviving Obligations: List of obligations that survive termination - include if any continuing obligations exist
6. Third Party Rights: Addressing any third party interests - include if there are guarantors or other involved parties
1. Schedule 1 - Property Details: Detailed description of the property including address and any included fixtures/fittings
2. Schedule 2 - Settlement Calculation: Detailed breakdown of all financial settlements including rent, deposits, and adjustments
3. Schedule 3 - Handover Checklist: List of items to be checked during property handover inspection
4. Appendix A - Property Inspection Report: Current condition report of the property to be completed at handover
5. Appendix B - Original Lease Agreement: Copy of the original lease agreement being terminated
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