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Building Contract


This Building Contract Agreement is made and entered into this ___ day of
________ 2010 between;

Insert Contractor’s details which expression shall include its personnel,

representatives, heirs and permitted assigns and;

Insert Buyer’s details a citizen of ______________________ holding

_______ passport number __________ currently residing at
________________________hereinafter referred to as the “Owner” which
expression shall include representatives, heirs and permitted assigns.

WHEREAS the Owner agrees to purchase/lease land evidenced by
Sublease agreement / land certificate No. ___ located at Villa No.___,
_________ Saba / Lovinia Bali.

WHEREAS the Contractor has agreed to arrange for the construction and
sale of a ________ bedroom villa measuring no less than ____M2 in built-
up area inclusive of a gazebo and swimming pool measuring no less than
____meters thereupon said land. The villa and the swimming pool will be
constructed in accordance with the architectural drawings, building
specifications, bills of quantities, contract conditions and other relevant
Contract Documentation referred to as Exhibits described herein.
Exhibits – Contract Documentation
The Contractor and the Owner have agreed that the attached exhibits will
be considered guidelines for the construction of the villa of said property
and constitute an important and integral part of the sale for without such
mutual understanding and agreement this sale would not have transpired;
Location map of villa – Exhibit B
Layout floor plans /design plan of the completed villa – Exhibit C
Map of development plan/surrounding villas indicating common areas and
access roads – Exhibit D
List of building specifications and materials – Exhibit E
Proof of construction tax paid and/or statement letter signed by the
Contractor prior to payment verifying this is the Contractor’s responsibility–
Exhibit F – supplied during/after construction
List of fixtures and fittings – Exhibit G
Projected progress plans for construction – Exhibit H
Building permit – Exhibit I
Proof of receipts paid for lease agreement - J
Inventory list of furnishings / fixtures / appliances – Exhibit K
Map of leased villa plot/land – Exhibit L
Copy of Lease agreement /land certificate /sub-division approval – Exhibit
Building quote and Bill of quantities – Exhibit N
Contractor’s Insurance – Exhibit O

Whereas the completed villa will precisely resemble the abovementioned

plans and be built essentially to all the specifications at the costs accepted
by the Owner as outlined in the attached exhibits A - O. In addition, the
Contractor guarantees that the officially approved architectural plans will
correspond exactly with the completed villa upon delivery to the Owner.

In the event the building permit plans are not compatible with the
completed villa and swimming pool, the Contractor will be responsible for
the additional costs to approve revisions to the building permit.

Therefore both parties have agreed to enter into this agreement in strict
accordance with the following terms and conditions.

Article 1 - Price
1.1. The Owner agrees to pay to the Contractor the sum of USD_____
( __________________ United States Dollars) including VAT - the contract
price for the construction of the villa described herein shall be paid as per
the following payment schedule:

Note; This amount will not include extra alterations, modifications and
additional works for which a separate amount will be quoted for and added
to the total amount.

The Contractor has received an advance payment of US$10,000 (Ten

Thousand United States Dollars) to reserve the villa and land prior to the
signing of this Contract.

1.2. Payment I: Payment of 25% of the purchase price minus the advance
payment of US$10,000 already received by the Contractor in the amount
of USD______ (__________________ United States dollars) is due within
seven (7) days of the date of signing this Agreement. Upon receipt of
payment I and finalization of the layout plans the Contractor will provide
written evidence (issued from Cipta Karya) that the building permit
application has been submitted for approval.

1.3. Payment II: Payment of 30% of the purchase price in the amount of
USD________ ( ________________ United States dollars) is due upon
mutual assessment by the parties that thirty percent (30%) of the
construction is satisfactorily completed. Thirty percent of the construction
will constitute the completion of the foundation works, frame work and
septic placement.

1.4. Payment III: Payment of 30% of the purchase price in the amount of
USD_________(____________ United States dollars) is due upon mutual
assessment by the parties that seventy five (75%) of the construction is
satisfactorily completed. Seventy five percent of the construction will
constitute the completion of the roof, exterior walls, plumbing installation,
electrical works, bench frames and toilets and bathroom fixtures. Also the
swimming pool and associated machinery installation.

1.5. Payment IV: Payment of 10% of the purchase price in the amount of
USD_____ (___________________ United States dollars) upon hand-over
of the villa to the Owner. Handover will constitute the completion of all
finishing works, gazebo and landscaping.

1.6. Payment V: Payment of 5% of the purchase price in the amount of

USD_______ (______________________ United States dollars) is due 90
ninety days (hereinafter referred to as the Maintenance Period) after the
hand-over date and upon mutual assessment by the parties that 100% of
the construction is satisfactorily completed.

1.7. The Owner retains the uncontested right to deduct any costs incurred
for the correction or maintenance of any of the structures or fittings during
this 90 day period. NB. Check this clause with your Contractor

1.8. The payments described in Article 1 shall be paid by the Owner to the
Contractor or to such banking account as nominated in writing by the
Contractor to the Owner, in United States Dollars. The Contractor agrees
to notify in writing the Owner at least ten (10) days before the time
stipulated for each payment if any changes to these details are requested
by the Contractor.



1.9 There will be no variation in the contract price as a result of any change
in the cost of materials, consumable stores, fuel, power, water,
communication freight or insurance rates, import duties or taxes, wage
rates or allowances in respect of labour etc, or for rises or falls in exchange
rates of currencies. Additions or omissions shall be valued in accordance
with the relevant price in the Bills of Quantities for work of a similar nature
set out in the Building Quote. A fair market valuation where there is no
work of a similar nature set out in the Contract will be assessed and
agreed upon by both parties.

Article 2 – Completion of Villa

2.1 Both parties acknowledge that the villa is completed in accordance with
the exhibits attached hereto and throughout the course of nine (9) months
from the date of signing this agreement. Therefore the Contractor agrees
to hand-over the completed villa to the Owner for its exclusive and
uninterrupted residence on ________.

2.2 In the event the time frames mentioned in Article 1 of this Agreement
lapse and the First Party does not succeed in meeting the stipulated
percentages of construction within such time frames the Owner shall have
the right to delay the next payment due until construction is satisfactorily
brought up to date.

A penalty shall be charged to the Contractor for default on delivery within

the advised nine month period in the amount of One Hundred United
States Dollars (US$100) per day until the Villa is handed-over for exclusive
use to the Owner or the Owner exercises the rights mentioned in Article
5.4 of this deed. -

Article 3 – Project Architect

3.1 _________ has been appointed as the Architect for this project
(referred to herein as The Project Architect) and he in conjunction with the
Contractor shall be responsible for certifying the stages of construction and
completion of the villa to the Owner.

3.2 The Owner retains the uncontested right to appoint an independent

qualified third party to assess the accuracy of all such certifications. The
Owner’s appointed assessor shall make the prevailing assessment of the
construction of the villa and both parties agree to endeavour to fulfill their
respective obligations in accordance with this independent third party’s

3.3 The Contractor states that all construction agreements and/or letters of
appointment relating to the property between the architect, contractor(s)
and developer, corresponds with the concept of the villa and its
surrounding development and will be made available to the Owner upon

3.4. All licenses and written regulations relating to the construction of the
villa shall be the responsibility of the Contractor including but not limited to
the official Building permit (IMB) which shall be applied for and finalized at
the cost of the Contractor.

3.5. The First party agrees that the physical building at the time of hand-
over to the Owner shall resemble in an exact nature the officially approved
(by Cipta Karya) architectural plans for the villa. Any revisions applicable
to such plans prior to hand-over shall be the responsibility and expense of
the Contractor.

3.6. All costs related to any other permits, bills, levies or licenses for the
villa during the construction period shall be for the accountability and
payment of the Contractor.

3.7 The Contractor shall give or provide all necessary site management,
security and supervision during the execution of the construction works as
well as during the establishment of the common areas.

3.8 The Contractor guarantees to the Owner the unrestricted use of the
internal access road to Villa no. _____ and to the beach. Although
construction will continue on the surrounding villa plots after the date of
handover- at no time during this period will the access to Villa no ____ be
blocked, restricted or encumbered. The maintenance of the internal
access road for the construction period shall be the responsibility and cost
of the Contractor. Furthermore the Contractor pledges to finish the entire
villa development within a period of twenty four months, to ensure the
Owners rights to enjoy a peaceful and comfortable residence are

3.9 The Owner will not be responsible to pay any salaries to any staff,
security, contractors or representatives of the building site during the
course of construction up until the hand-over date. The Contractor agrees
to pay all salaries due to all employees, sub-contractors and workmen on
the site up until the date the maintenance period ends. All payments due
to said parties until the end of the maintenance period shall be the
responsibility of the Contractor.

Article 4 – Contractor Obligations

-The Contractor guarantees to the Owner:
that the Contractor is entitled and authorized to build and sell said villa to
the Owner;
the Contractor warrants the Owner at any time and may always have
access to the building site and villa;
the Contractor has agreed to sign each and/or all documents required for
the assignment of each permit for separate facilities on the said
property that include: water, electricity, telephone and others if
necessary for the Owner;
Should due to any other reason there be any other party claiming to have a
right to said villa, the Contractor promises to provide all required
documentation re-affirming the Owner’s uncontested rights to the villa
and the right to assign the ownership to said villa to the Owner, and
any costs arising as a consequence of such disputes shall be for the
sole account of the Contractor;
The Contractor shall be prepared to immediately provide the required
information to the Owner/its representative and the local competent
authorities for any structures or machinery thereupon said land.
The Contractor shall be responsible to deal directly with any inquiries from
any authorities including the local banjar and shall be responsible to
pay any donations or levies due for the duration of this contract.
The Contractor shall not without the written consent of the Owner assign
this Contract.
The Contractor at no expense of the Owner shall make good any defective
work resulting from design or constructive failure.
The Contractor shall provide and keep on site a copy of the current
construction progress program for the Owner’s inspection. The program
shall be updated at not less than weekly intervals in corresponding with the
progress of the works.
The Contractor will provide manuals with supplier guarantees for all
appliances and machines in the villa.

Therefore the Owner shall be indemnified from any and all claims related
to such matters;
-Should the above elements not be satisfied by the Contractor, this
agreement shall be rendered void by law and all monies paid up to date
which have been paid to the Contractor shall be refunded upon demand
and contemporaneously to the Owner no later than seven (7) days from
the day of nullification.

Article 5 – Penalties
5.1 In the event the Owner fails to pay an amount due to the Contractor
within ten (10) days of receiving an invoice for payment due with the
exception of terms outlined in Article 2.2 the Second Party shall pay a fine
in the amount of $700 (seven hundred United States Dollars) for every
week late. The maximum late period will be 60 days (referred to as the
notice period) and will commence immediately upon the expiration of the
ten (10) day notification period. Exceptions to this ten (10) day time frame
will be dealt with at the Contractor’s discretion.

5.2. If at the expiration of the Notice Period referred to in Article 5.1 the
default has not been remedied, then the construction agreement shall be
cancelled. All agreements signed pursuant to the transfer of the villa will be
deemed null and void and the Owner will have no rights to pursue
ownership or lease of the villa.

5.3. In the event the Contractor fails to deliver the completed villa to the
Owner within the stipulated hand over period of nine months from the date
of signing this agreement, the Contractor agrees to compensate the Owner
by paying USD100 per day until satisfactorily completing and handing-over
the building/villa with a maximum leniency period of 28 days.

5.4. If within the leniency period the villa is not handed over, the Owner
shall have the option either:

(i) to cancel any further phases of construction and receive back from the
Contractor the amount equal to a 90% portion of the previous installment
paid to the Contractor as liquidated compensation for loss of the
construction contract, despite lack of default on the part of the Owner; or
(ii) to cancel the entire Contract, and to receive from the Contractor
reimbursement of all amounts thus far outlaid by the Owner.
5.5. In the event that the Owner chooses option (i) in consideration of the
liquidated compensation of 10% of the construction price being paid to the
Contractor, the Owner shall be free to engage any other third party to
finalize construction upon the Land without interference from the
Contractor. This provision will extend to any stage of construction the
Owner shall have the right to take over the construction and engage any
other party to complete and, provided the Contractor is cooperative and
hands over all relevant architectural plans, designs and paperwork
necessary to the Owner for the sake of ensuring the newly engaged
Contractor can complete the project accordingly, the Owner will pay a
liquidated compensation equal to 10% of the fee for the not yet
constructed portion to date.

Article 6 - Expenses
6.1. The hand-over date shall be defined as the date corresponding with
the time frame of nine (9) months from the date of signing this Contract.
Commencing from the hand-over date all incomes and expenses relating
to the villa shall be for the entitlement and the responsibility of the Owner,
save for the final 90 day period after the handover whereby costs incurred
for the maintenance of any structures or fittings will be at the expense of
the Contractor or will be deducted from the remaining 5% payment due,
and also subject to Article 8.

6.2. Any debts or expenses originating prior to the hand-over date of the
villa to the Owner shall be the full undisputed accountability and payment
of the Contractor.

Article 7 - Guarantee
7.1 The First Party guarantees to the Second Party the building quality for
one (1) year after the handover date. Any structural defects shall be
remedied within a reasonable time frame (determined by the nature of the
defect) at the expense of the Contractor.

7.2 A structural defect shall be defined as damage to internal and external

plumbing, all machinery, roofing and walls – inclusive of but not limited to
leakage, water marks and cracking, all spouting and drainage pipes, hot
water systems, septic facilities, toilets, tap, sink and wash basin fittings,
door and window fittings, flooring (however does not include cracked tiles
or damage caused by a direct result of the Owners actions). Also,
electrical cabling and power supply, generators installed by the Contractor
servicing the villa and any outdoor paving and decking areas.

Article 8 - Notices
8.1. All notices and other communications to be given to a party under this
Agreement shall be made in English by facsimile delivery or by electronic
mail (email) to the address of the party as first written above or to such
address as may be designated by the party from time to time.

Article 9 – Force Majeure

9.1 Neither party shall be liable for any delay or failure in the performance
of any of its obligations under this Agreement to the extent that such delay
or failure is cause by Force Majeure, provided that the party whose
performance is prevented or delayed by such Force Majeure shall make
every good faith effort to overcome or dispel the event of Force Majeure.
“Force Majeure” shall mean any event or circumstances beyond the
reasonable control of the party whose obligation it affects that renders due
performance of an obligation under this Agreement illegal or impracticable
including but not limited to natural disasters, strikes, war, riot, civil
commotion, perils of the sea, or embargo. Immediately upon the
occurrence of any event of Force Majeure which affects performance
under this Agreement, the affected party shall notify the other party,
specifying the nature of the event, the effect of the event on the party’s
performance and the estimated duration of the event. The affected party
shall also notify the other party immediately upon cessation of the Force
Majeure event.

Article 10 - Costs
10.1 The notary legalization of this contract is the responsibility of the
Owner. The notary fees will be the responsibility of the Owner. All fees
related to independent legal representation appointed by the Owner shall
be their own responsibility.

10.2 The expense of the Building tax (PPN) shall be paid by the Contractor
who shall be responsible for providing all necessary documents including
but not limited to receipts for materials and building quotes pursuant to
liaising with the relevant tax authorities.

10.3 Electricity, water, waste disposal, banjar, road maintenance costs and
telephone expenses and land and building taxes originating prior to the
handover of the completed villa are the full responsibility of the Contractor.

10.4 The building permit (IMB) cost is for the cost and responsibility of the

Article 11 – Death
11.1 In the event of one or both parties demise before the hand-over date,
this Agreement automatically will continue and remain valid between the
parties respective heirs.

Article 12 – Insurance Against Injury of Persons

12.1 The insurance in respect of claims for personal injury to, or the death
of any person under a contract of service with the Contractor or any sub-
contractor as the case may be and arising out of and in the course of such
person’s employment, shall be placed with the Asuransi Tenaga Kerja
(ASTEK) or equal insurance entity. The Contractor guarantees to cover all
such costs and obligations to procure such insurances in respect to any
person employed by himself or any nominated sub-contractor. Hence the
Owner will remain free of claim or burden of such injury or death of any
person(s) on the building site for the duration of the construction period.

Article 13 – Insurance of the Equipment and Works

13.1 All work executed and all unfixed materials and goods, delivered to
place on or adjacent to the work and intended there for shall be at the sole
risk of the Contractor (or his appointed sub-contractors) as regards to loss,
theft or damage by fire, lightening, explosion, storm, tempest, flood,
bursting, or overflowing of water tanks, apparatus or pipes, earthquake,
aircraft and other aerial device or articles dropped there from, riot and civil

13.2 The Contractor shall maintain in the joint names of the Contractor and
the Owner a proper policy of insurance against that risk in Article 13.1 and
for all work executed and such policy shall be effective for all unfixed
materials and goods as aforesaid against loss or damage. If any loss or
damage affecting the works or any part thereof, then upon discovery of
said loss or damage the Contractor shall forthwith give notice in writing to
the Owner of the extent, nature and location thereof and the Contractor
with due diligence shall restore the works damaged, replace or repair any
unfixed materials or goods which have been destroyed, remove and
dispose of any debris and proceed with the carrying out and completion of
the works. All claims for insurance cover for such damages will be the
responsibility of the Contractor.

Article 14 – Governing Law

14.1 The provisions of this Agreement shall be agreed upon and signed in

14.2 In regards to this Agreement and all its consequences the parties
have chosen a general and permanent domicile at the clerk’s office of the
District Court in Denpasar and have subdued themselves to the laws of the
Republic of Indonesia.

HEREBY this Contract is entered into on the _________ 2010 and signed
voluntarily and in good faith by the parties and the witnesses stated hereto;