How a 'Standard' Real Estate Purchase Agreement in Bali Almost Resulted in Million-Dollar Losses

A client recently contacted our consulting agency with a request for a legal review of a real estate purchase agreement. At first glance, the deal seemed standard, and the developer appeared reliable and responsible. They provided all the documents upon request and always responded quickly, but they were rushing to get the agreement signed and the payment made, claiming that everything was selling out very fast. Nevertheless, the client decided not to take any risks and to check all the details with our lawyers.

Pitfalls in the Agreement

After carefully examining the contract, our specialists identified a number of serious violations and potential risks. The document contained hidden terms that could put the client in an extremely disadvantageous position:

Vague deadlines for the transfer of the property — the developer was not obligated to transfer the property on a specific date.
Right to increase the cost — even after signing the contract, the price could be revised upwards.
Lack of liability for deadlines — the contract did not provide for any sanctions against the developer.

The lawyer prepared a detailed legal opinion and a list of necessary changes and additions to the contract. With this document, the client approached the developer with a request to make corrections.

Developer's Reaction

However, the company's reaction was unexpected. The developer began to respond less often and was in no hurry to make corrections or provide comments on it, and eventually stopped responding to the client altogether, blocked their contacts, and effectively ceased all communication.

Outcome for the Client

This case became a telling example of how important it is to verify even seemingly standard agreements with the involvement of professionals. Yes, in the end, the client did not purchase property from this company, but at least they avoided potential multi-million dollar losses and legal disputes in the future.

Saving during the review stage always results in significant risks that you bear on your shoulders, trusting people who may not have good intentions. When it comes to large investments, such as purchasing real estate, it is necessary to assess the situation soberly and not take people at their word. A timely audit helps not only to save money but also nerves.

Planning to buy property in Indonesia?

We can help:

Conduct a detailed audit of the contract;
identify hidden threats;
prepare adjustments and defend your interests.