The Agreement To Cancel Lease is a crucial document used in Indonesian property law when parties mutually agree to terminate an existing lease arrangement before its natural expiration. This document becomes necessary when both the lessor and lessee wish to formally end their lease obligations, whether due to business circumstances, property sales, or other mutual agreements. It must comply with Indonesian Civil Code (KUHPer) requirements, particularly Articles 1548-1600 governing lease agreements, and includes essential provisions for the termination date, financial settlements, property restoration requirements, and mutual releases. The agreement protects both parties' interests by clearly documenting the terms of separation and preventing future disputes. It's particularly important in commercial and high-value residential leases where formal documentation is crucial for legal and financial clarity.
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1. Parties: Identification of the Lessor and Lessee with complete legal names and addresses
2. Background: References to the original lease agreement, including its date and key terms, and the mutual desire to terminate
3. Definitions: Definitions of key terms used in the agreement, including references to the Original Lease Agreement, Termination Date, and any other relevant terms
4. Termination Agreement: Clear statement of mutual agreement to terminate the lease and the effective date of termination
5. Return of Premises: Terms regarding the condition and timeline for returning the leased premises
6. Settlement of Accounts: Agreement on final settlement of any outstanding rent, utilities, deposits, and other financial obligations
7. Release of Obligations: Mutual release from future obligations under the original lease agreement
8. Governing Law: Specification that Indonesian law governs the agreement
9. Execution: Signature blocks and execution requirements
1. Property Damage Settlement: Terms for addressing any damage to the property beyond normal wear and tear, used when there are specific repair or restoration requirements
2. Third Party Rights: Provisions regarding any third-party interests or rights that need to be addressed, such as sublease arrangements or registered encumbrances
3. Confidentiality: Terms regarding confidentiality of the termination agreement, included when sensitive commercial information is involved
4. Dispute Resolution: Specific procedures for resolving any disputes that may arise from the termination, included in more complex commercial situations
5. Tax Implications: Provisions addressing tax responsibilities and implications of the early termination, included when significant tax considerations exist
1. Schedule A - Original Lease Agreement: Copy of the original lease agreement being terminated
2. Schedule B - Property Inspection Report: Documentation of the current condition of the premises
3. Schedule C - Settlement Statement: Detailed breakdown of all financial settlements, including security deposit disposition
4. Schedule D - Handover Protocol: Checklist and procedure for the physical handover of the premises
5. Appendix 1 - Required Permits: Copies of any governmental or regulatory approvals required for the termination, if applicable
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Compliance
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Property Manager
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Real Estate Director
Property Management Supervisor
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Business Operations Manager
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