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“Make sure that the parties in the lease agreement should be the lessor and the lessee. If the lessor is not the owner of the property, the lessee should make sure that the lessor has the right to lease it to the other party.”

The activities of leasing the property (either landed house or apartment) can be found in the daily life of most of the people. The first thing that you have to do in the lease’s activity is to create the lease agreement. Here are at least any five important things that should be in the lease agreement:

  1. Parties
  2. Make sure that the parties in the lease agreement should be the lessor and the lessee. If the lessor is not the owner of the property, the lessee should make sure that the lessor has the right to lease it to the other party. 

  3. Lease Term
  4. The lease term should be declared clearly in the agreement. It should be stated the period of the lease agreement. The possibility (if any) of the parties to extend the period should also be stated in the agreement. Furthermore, the term should also consist of the mechanism to end the lease agreement and also the consequences (for example, the lessee should pay the penalty if he or she breaks the agreement before it ends).

  5. Lease Fee
  6. The lease fee has to be stated in the agreement. It should be declared clearly what the lease fee is covered all the items or any additional items as requested by both parties. Moreover, based on Indonesian Law, the lease fee should be paid in Indonesian Rupiah.

  7. Facilities
  8. The lease agreement should state what kind of facilities that will be obtained by the lessee. For example, in the lease of apartment, the lessee should make sure which facilities that will be enjoyed privately and which one that has to be shared with others. Also, is it any additional charges or not for the facilities?

  9. Payment Method and Tax
  10. Last but not least, don’t forget to mention the method of the payment and tax in the lease agreement. The payment method should be declared by transfer or cash. If the method will use the bank transfer, make sure that all the information of the Bank Account is already provided in the agreement. For the tax, the lessor should also make sure that the tax is include or exclude from the main fee.

The five items above are the important things that will help both parties to create effective and efficient lease agreement.

How can ELSON help you?

ELSON Indonesia is a company that focus on providing comprehensive legal solution for expatriates, foreigner, and mix marriage couple in Indonesia.

Contact Us:
Email: info@elson.co.id
Phone: 0819 3274 1 333

Author :

Latifah Kusumawardani