Legal Due Diligence in Property Investment
Legal Due Diligence in Property Investment

Legal Due Diligence in Property Investment

In the world of property investment in Indonesia, particularly corporate and commercial property, mastering the art of legal due diligence is a crucial step before making any investment decision.

This process involves a series of steps to gather accurate and comprehensive information about the property to be purchased.

Let's delve into the steps in detail!

Understanding Due Diligence in Property Investment

Property due diligence is the process of gathering information and conducting analysis on a property before entering into a purchase transaction. Its purpose is to minimise risk and ensure that the investment decision is based on a thorough understanding of all aspects affecting the property's value and potential.

The process involves several steps, including legal, technical, financial, market, and environmental analysis of the property. The first step is legal analysis to verify ownership status, construction permits, and other legal agreements. Next, technical analysis is conducted to evaluate the physical condition of the property.

The financial aspect is a key focus of due diligence, with an evaluation of the property's financial performance to understand the projected return on investment. Market analysis is conducted to understand property price trends, market demand, and the potential for future appreciation in the property's value. The environmental aspect is also examined to ensure there are no serious issues that could affect the property's value.

Steps in Conducting Legal Due Diligence for Property

Identify Objectives and Criteria

Determine whether the purpose of purchasing the property is for occupation, rental, or resale.

Legal Inspection
Verify ownership of the property from the developer or previous owner. Check for legal encumbrances, disputes, mortgages, and necessary permits.

Physical Inspection
Conduct a physical inspection of the property to assess the condition of the building and infrastructure, as well as evaluate the structural condition and conduct a soil test.

Financial and Tax

Review the property's financial statements to understand cash flow and operating costs. Check the property's tax payment history.

Market Research

Analyse property market trends in the area. Compare with similar properties to get an idea of the market value.

Contracts and Related Documents

Review the sales contract and other documents. Ensure that all terms and conditions are clearly stated.

Risk and Potential Evaluation

Identify risks associated with the property. Recognise potential appreciation and future income.

Negotiation and Agreement

Use the information from the due diligence to negotiate with the seller. Ensure that the agreement is reflected in the contract.

Transaction Closing

Finalise transaction documents. Make payments as agreed and complete the property ownership process.

The Importance of Legal and Ownership Document Checks for Property

Legal document checks are crucial in ensuring the legal ownership of a property and its freedom from legal issues. This protects both the buyer and seller, ensuring a smooth transaction without any future problems. In-depth information about the property's legal status aids in making informed decisions.

Benefits and Risks of Due Diligence in Property Investment


  • Better risk assessment.
  • Thorough understanding of the property.
  • Accurate valuation.
  • Improved negotiation position.
  • Legal compliance.


  • Cost and time.
  • Discovery of risks that may cancel the investment.
  • Information limitations.
  • Legal complexities.
  • Reliance on third parties.

The due diligence process is a crucial step for making informed and intelligent investment decisions in the property world. While there are risks and challenges, long-term benefits can be gained by conducting thorough due diligence.

Before proceeding further, be sure to work with a team of professionals such as lawyers, property inspectors, accountants, and real estate agents to ensure accurate information. With this wise step, you can minimize risk and maximize the potential profit from your property investment.

Legal Due Diligence Audit with Lets Move Group

Lets Move Group offers due diligence services to assist you in the property purchase process. Due diligence is a comprehensive investigation of the property you are about to purchase to ensure its legal and financial security.

Contact Lets Move Group today and achieve security in your property transactions!

Get Your Free Consultation

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  • Permanent employee/self-employed for at least 1 year in the same company/total 2 years of work
  • Professional/Businessman working for at least 2 years in the same field
  • At least 18 years old or married

General Personal Requirements

  • Photocopy of husband’s / wife’s ID card (if married)
  • Photocopy of Family Card
  • Copy of Marriage Certificate (if married)
  • Photocopy of Tax ID Number of Applicant
  • Salary Slip / Certificate of Income for the last 1 month original
  • Photocopy of 3 months bank statements
  • Developer’s House Booking Letter / Broker’s Cover Letter