A Risky $270,000 Villa Contract in Bali: What We Found Inside
A client recently came to us with a simple request: check a contract for the construction of four villas on leased land in Bali. The investment? $270,000.
The document they received was called an “Agreement Letter.” On the surface, it looked like a basic contract. But once we took a closer look, things didn’t add up — and what we found could have easily cost the client their entire investment.
Here’s what was wrong:
1. It wasn’t even a real contract.
The document was titled “Agreement Letter” — which, in international practice, usually means a letter of intent, not a binding agreement. For a deal of this size, that’s a huge red flag.
2. No information about the parties involved.
There were no passport numbers, addresses, or contact details.
The contractor wasn’t acting on behalf of a company, but as a private foreign individual — who, by law, can’t legally sign this kind of agreement or receive payments for construction in Indonesia.
No mention of:
Construction license
KITAS (work visa)
Legal authority to sign the deal
3. Payments to a personal account.
The entire $270,000 was supposed to be transferred to the contractor’s personal bank account. That’s a major problem:
It violates Indonesian immigration, tax, and labor laws
It makes tracking the funds impossible
And worst of all — there’s no legal protection if something goes wrong
4. No technical details at all.
The contract didn’t include:
Floor plans or drawings
Budget breakdown
Timeline
Material specs or quality standards
In short, the contractor could build anything — and the client would have no legal grounds to complain.
5. Payments weren’t tied to actual progress.
There was no requirement for signed completion reports or inspections. The client could pay for a phase of work — and never see it finished.
6. Missing required permits.
In Bali, construction legally requires:
PBG (building permit)
SLF (certification of proper use)
These were never even mentioned — meaning the villas may never be legally approved or usable.
7. No dispute resolution clause.
The contract didn’t say:
Which country’s laws applied
How disputes would be resolved
What rights the client had if something went wrong
Our conclusion?
This wasn’t a real contract — it was a bundle of legal and financial risks.
We advised the client not to sign, and after a full consultation, they clearly saw what kind of situation they’d nearly stepped into.
Thinking about building in Bali?
Don’t sign anything without a proper legal review. The cost of skipping that step? Your investment.
Let professionals help you protect your money — and your peace of mind.
