Ready to use legal template

Drafted by experienced lawyers

Compliant with Indonesian law

Ready to use legal template

Drafted by lawyers

Compliant with Indonesian law

HomeBuy a propertyIntent to purchase letter

Learn more about Intent to Purchase Letter in Indonesia

The journey towards ownership often begins with preliminary discussions, which can be either verbal or written, and may involve the exchange of letters. One such crucial document is the letter of intent, which allows one party to express their preliminary agreement to the terms of the Real Estate Purchase Agreement while the finer details are still being negotiated. This letter signifies the mutual willingness to explore and negotiate all obligations associated with the impending contract. For those looking to navigate the property market in Indonesia, Themis Partners provides a meticulously crafted letter of intent template, available in English and tailored to the Indonesian legal framework. This template serves as a foundational tool for prospective buyers, ensuring clarity and precision in their initial offer and facilitating a smooth transition towards the finalization of the Real Estate Purchase Agreement.

Table of contents


What is an Intent to Purchase Letter?

An Intent to Purchase Letter (LOI) is a written statement of intent to acquire a seller’s products or services. The letter’s purpose is to demonstrate that the customer is serious about acquiring a seller’s items in the future. To ensure that the seller does not contemplate an offer for an extended period of time, the buyer may include a deadline for accepting or refusing an offer.

The parties may elect to make a non-binding letter with the goal of drafting a more complete agreement in the future. However, if agreed upon by the buyer and seller, the form may be legally binding, giving it legal effect and therefore providing legal protection to the parties.

Why use an Letter of Intent in Indonesia?

The Letter of Intent to buy is typically used early in the process of buying a property in Indonesia. It comes in handy when you want to indicate your intent to acquire and begin negotiations on all aspects of the deal. This analysis will necessitate the mobilization of your time as well as the commitment of specific costs (kind of property, price, payment, property transfer, construction, and so on). The continuance of conversations with the purchasers may require the disclosure of sensitive information to the seller. As a result, it is critical to allow you to withdraw under appropriate legal terms if certain characteristics of the chosen property do not match your expectations.

What is included in the Intent to Purchase Letter?

A professional LOI will include essential facts such as:

➤ The seller's and buyer's legal namesn
➤ Property's legal addressy
➤ Purchase price has been agreed upon
➤ The whole earnest deposit was agreed upon
➤ The deadline for signing the Sales and Purchase Agreement
➤ Terms and circumstances governing the 2-3% earnest deposit
➤ Take note of any fixtures or furniture that are included in the sale

Who is covered by the Letter of Intent to Purchase?

The Letter of Intent to Purchase is especially useful for sellers who are worried about the disclosure of secret corporate information to other parties.

However, an Letter of Intent(LOI) isn’t only for sellers. These contracts safeguard all parties to the transaction by explicitly defining rights and duties throughout the transaction-making process. These papers may include no-shop rules or prevent untrustworthy vendors from wasting a buyer’s time by establishing explicit deadlines or guaranteeing an intensive due diligence procedure.

What to do after signing the Letter of Intent?

1. Purchase Agreement and Due Diligence

Following the signing of the Letter of Intent to Purchase, the following stages are to negotiate the acquisition agreement and conduct due diligence. These are distinct processes, although they normally occur concurrently and require around 90 days to complete. The buyer will undertake due diligence and negotiate the parameters of a purchase agreement during this period.

2. Closing

The business truly changes hands at the closure. This process is usually handled by attorneys and can take anywhere from three to five days, depending on the intricacy of the transaction. At closing, the buyer will wire transfer any cash consideration to your bank account and/or issue shares representing any stock consideration. You will simultaneously transfer the purchased shares or assets using relevant instruments.

Is a Letter of Intent legally binding in Indonesia?

While an Intent to Purchase Letter itself is typically non-binding, it can lead to a binding agreement once both parties agree on the final terms and sign a formal contract. To ensure this process is legally sound in Indonesia, it’s recommended to consult with an attorney. They can help you draft the letter and navigate the legal requirements of property transactions in Indonesia. This ensures that the transaction is conducted in accordance with Indonesian law, providing legal protection for all parties involved.

What happens if there is a breach?

The majority of letters of intent include wording that renders the Letter of Intent non-binding. While each circumstance is unique, in most cases, and subject to certain constraints, a side can back out of the transaction. However, signing a LOI does not mean that the parties have not committed to certain duties. If the Letter of Intent to Purchase is to be non-binding in relation to the proposed transaction, wording to that effect must be included.

Share information

Why Themis Partner ?

Make documents forhundreds of purposes

Hundreds of documents

Instant access to our entire library of documents for Indonesia.

24/7 legal support

Free legal advice from our network of qualified lawyers.

Easily customized

Editable Word documents, unlimited revisions and copies.

Legal and Reliable

Documents written by lawyers that you can use with confidence.

DOWNLOAD NOW