Learning Point Even though buildings without a Building Permit ("IMB") have been purchased by the buyer, and the buyer then apply a building permit for the building, the building still violates the law. The act of the Mayor rejecting the Plaintiff's application to...
Background Government of Republic of Indonesia recently issued Government Regulation No. 34 of 2017 regarding Income Tax on the Revenue of Renting out Land And/or Building (“Government Regulation 34/2017”). This regulation will come into force on 2 January 2018....
To accelerate the implementation of development program, government later issued Government Regulation Number 34 of 2016 on Income Tax on Income from Transfer of Land and/or Building Right, and Conditional Sales and Purchase of Land and/or Building Agreement including...
Background On 31 December 2015, Minister of Finance Republic of Indonesia has issued the Minister of Finance Regulation Number 269/PMK.010/2015 on the Limitation of Selling Price of Modest Condominium Unit and Individual Income Who Obtains the Modest Condominium Unit...
Background
Business sale and purchase of property has been demanded by many people. In performing the business sale and purchase of property, it does not only need an agreement between seller and buyer, but there are things that shall be performed by both parties as one of the obligations to State. The relevant obligation is payment of a tax in acquisition of property that should be performed by buyer and seller.
In Indonesia, it has been known some types of tax that has to be met by seller and buyer in business sale and purchase of property, as follows:
1. Land and Building Tax (L&B Tax)
The regulation on L&B Tax is contained in the Law Number 12 of 1985 on Land and Building Tax as amended by the Law Number 12 of 1994 on the Amendment of Law Number 12 of 1985 on Land and Building Tax (“L&B Tax Law”).
Based on the Elucidation in Article 3 paragraph (2) of L&B Tax Law, L&B Tax is a state tax which is the majority of its revenue is a regional income that is used for the provision of facility that is also enjoyed by the Central Government and Local Government. In the beginning, L&B Tax is a tax where is its administration process is performed by the central government and all revenues are distributed to the regions with a certain proportion. In the next development, the Law Number 28 of 2009 on Regional Tax and Retribution (“Law No. 28/2009”) is applied in which the entire management process of L&B Tax, especially in rural and urban sector will be performed by local government. Tariff of L&B Tax which is imposed to tax object is 0, 5%.
Based on the Minister of Finance Decree Number 362/KMK.04/1999 on the Grant of Land and Building Tax Reduction, as amended by the Minister of Finance Regulation Number 110/PMK.03/2009 on the Amendment of Minister of Finance Decree Number 362/KMK.04/1999 on the Grant of Land and Building Tax Reduction, the amounts of L&B Tax incentive are:
• Taxable Sales Value (NJKP) of 20% for the Tax Object Sales Value (NJOP) < Rp 1 Billion; • The grant of Tax Object Sales Value which is not imposed Tax (NJOPTKP); • The grant of reduction because of certain condition of tax object which is related to the tax subject and/or because of other specific causes. 2. Acquisition Levy on Right of Land and Building (Bea Perolehan Hak Atas Tanah dan Bangunan / BPHTB) The regulation on Acquisition Levy on Right of Land and Building is governed in the Law Number 21 of 1997 on Acquisition Levy on Right of Land and Building as amended by Law Number 20 of 2000 on the Amendment of Law Number 21 of 1997 on Acquisition Levy on Right of Land and Building (“BPHTB Law”). Under the Article 1 paragraph (1) of BPHTB Law, Acquisition Levy on Right of Land and Building is a tax which is imposed to the acquisition of right of land and or building. The Acquisition Levy on Right of Land and Building is imposed to the buyer (Article 2 paragraph (1) and paragraph (2) of BPHTB Law). Tariff of Acquisition Levy on Right of Land and Building is 5% (five percent). Under the Minister of Finance Decree Number 561/KMK.03/2004 on the Grant of Acquisition on Right of Land and or Building Reduction, as amended by the Minister of Finance Regulation Number 104/PMK.01/2005, as amended by Minister of Finance Regulation Number 91/PMK.03/2006 on the Second Amendment of Minister of Finance Regulation Number 561/KMK.03/2004 on the Grant of Acquisition on Right of Land and or Building Reduction, the incentive of Acquisition Levy on Right of Land and Building property are: The grant of Tax Object Sales Value which is not imposed a Tax (NPOPTKP); The grant of reduction because of certain condition of taxpayer which is related to tax object and/or because of other certain causes. 3. The Income Tax of the Income from Transfer on Right of Land and Building (the Income Tax in Article 4 paragraph 2) The regulation on Income Tax on The Income from Transfer on Right of Land and Building is set forth in the Article 4 paragraph (2) of Law Number 7 of 1983 on the Income Tax, as amended by Law Number 7 of 1991, as amended by Law Number 10 of 1994, as amended by Law Number 17 of 2000, as amended by Law Number 36 of 2008 on the Fourth Amendment of Law Number 7 of 1983 on the Income Tax ("Income Tax Law"). Income tax which is imposed to the income of transfer on right of land and or building is 5% (five percent) of gross amount of transfer on land’s or building’s value. Income tax of transfer on right of Simple House and Simple Condominium which is performed by taxpayer that is his/her principal business to transfer on right of land and/or building is 1% (one percent) of gross amount of transfer value. Under the Article 4 paragraph (2) of Income Tax Law, the income that may be imposed the final tax are: a. the income of deposit interest and other savings, bond interest and state debenture, and saving interest which are paid by the cooperative to the individual cooperative member; b. the income of lottery prize; c. the income of shares and other securities transaction, derivative transaction which is traded on the stock, and the share sale transaction or transfer of equity shares in the company's partner which is earned by venture capital company; d. the income of transfer of asset transaction in the form of land and/or building, construction service business, real estate business, and rent of land and/or building; and e. the other certain incomes, which is set by or under a Government Regulation. Based on the provision in the Article 4 paragraph (2) letter d, it may be concluded that the income of sale and purchase of property transaction is imposed to the income tax. Under the Government Regulation Number 48 of 1994 on Payment of Income Tax on Income from The Transfer on Right of Land and/or Building, as amended by Government Regulation Number 27 of 1996, as amended by Government Regulation Number 79 of 1999, as amended by Government Regulation Number 71 of 2008 on the Third Amendment of Government Regulation Number 48 of 1994 on Payment of Income Tax on Income from the Transfer on Right of Land and/or Building, the incentive of income tax on the income from transfer on right of property land are: The Income Tax Exemption for individual person who has an income below the tax exempt income (PTKP/Penghasilan Tidak Kena Pajak) which is performing the transfer on right of land and/or building with transfer gross amount less than Rp 60,000,000.00 (sixty million Rupiahs) and is not a broken amount; The imposition of 1% (one percent) tariff from the gross amount of transfer value on the transfer on right of Simple House and Simple Condominium which is performed by Taxpayer which is the essential business is performing the transfer on right of land and/or building (general tariff of 5%). 4. Value Added Tax (VAT) The regulation of VAT is set forth in the Law Number 8 of 1983 as amended by Law Number 11 of 1994, as amended by Law Number 18 of 2000, as amended by Law Number 42 of 2009 on Third Amendment of Law Number 8 of 1983 on Value Added Tax of Goods and Services Value and Luxury Sales Tax (“VAT Law”). Under the Elucidation of VAT Law, Value Added Tax is a tax on the consumption of goods and services in the Custom Area which is imposed in multilevel in every production and distribution lines. Custom Area is the region of Republic of Indonesia which covers land, water, and air space above it, and certain places in the Exclusive Economic Zone and continental shelf which is applied to the Law that is set out of customs. Tariff of VAT is 10% (ten percent) of transaction value. Article 4 paragraph (1) of VAT Law states that the VAT is imposed on: a. delivery of taxable goods in the Customs Area which is performed by the entrepreneur; b. import of taxable goods; c. delivery of taxable services in the Customs Area by entrepreneur; d. the utilization of Intangible Taxable Goods from the outside of Customs Area in the Customs Area; e. the utilization of Taxable Services from the outside of Customs Area in the Customs Area; f. export of Tangible Taxable Goods by a Taxable Entrepreneur; g. export of Intangible Taxable Goods by a Taxable Entrepreneur; and h. export of Taxable services by Taxable Entrepreneur. The Exception for the VAT Collection 1. For Simple House and Very Simple House Under the Minister of Finance Regulation Number 36/PMK.03/2007 on the Limitation of Simple House, Very Simple House, Simple Condominium, Pondok Boro, Student Dormitory, and other houses, which is based on Delivery is Exempted from Value Added Tax, as amended by Minister of Finance Regulation Number 80/PMK.03/2008, as amended by Minister of Finance Regulation Number 31/PMK.03/2011 on the Second Amendment of the Minister of Finance Regulation Number 36/PMK.03/2007 on the Limitation of Simple House, Very Simple House, Simple Condominium, Pondok Boro, Student Dormitory, and other houses, which is based on Delivery is Exempted from Value Added Tax; the Simple House and Very Simple House which is exempted from Value Added Tax is a house which is the acquisition is cash or financed through subsidized or not subsidized credit facility, or through the financing based on the Islamic principle, which meets the following provisions: a. The building area is not more than 36 m2 (thirty-six square meters); b. The sale price is not more than Rp 70,000,000.00 (seventy million Rupiah); c. It is the first house that is owned and used alone as a residence and not transferred within a 5 years period of time since it is owned. 2. For Simple Condominium Under the Minister of Finance Regulation Number 36/PMK.03/2007 on the Limitation of Simple House, Very Simple House, Simple Condominium, Pondok Boro, Student Dormitory, and other houses, which is based on Delivery is Exempted from Value Added Tax, as amended by Minister of Finance Regulation Number 80/PMK.03/2008, as amended by Minister of Finance Regulation Number 31/PMK.03/2011 on the Second Amendment of the Minister of Finance Regulation Number 36/PMK.03/2007 on the Limitation of Simple House, Very Simple House, Simple Condominium, Pondok Boro, Student Dormitory, and other houses, which is based on Delivery is Exempted from Value Added Tax; Simple Condominium which is exempted from Value Added Tax is a multistory building which is built in an environment that used as a dwelling place which is equipped with bathroom (WC) and kitchen either united with dwelling or separate unit with communal usage, which is the acquisition in cash or financed through subsidized or not subsidized credit facility, which meet the following conditions: a. the selling price of each dwelling include condominium is not more than Rp 75,000,000.00 (seventy five million rupiahs); b. building area of each dwelling is not more than 21 m2 (twenty-one square meter); c. the construction refers to the Minister of Public Work Regulation which manages the Technical Requirement of Condominium’s Construction, and d. It is the first residential unit that is owned, used alone as a residence and is not transferable within 5 (five) years since it is owned. 3. For Simple Ownership Condominium (Rumah Susun Sederhana Milik/ Rusunami) Under The Minister of Finance Regulation Number 155/KMK.03/2001 on the Implementation of Value Added Tax which is exempted on Import and/or Delivery of Certain Taxable Goods that is Strategic, as amended by Minister of Finance Regulation Number 363/KMK.03/2002, as amended by Minister of Finance Regulation Number 371/KMK.03/2003, as amended by Minister of Finance Regulation Number 11/PMK.03/2007, as amended by Minister of Finance Regulation Number 31/PMK.03/2008 on the Fourth Amendment of Minister of Finance Regulation Number 155/KMK.03/2001 on the Implementation of Value Added Tax which is exempted on Import and/or Delivery of Certain Taxable Goods that is Strategic; Simple Ownership Condominium is a multistory building which is built in an environment that used as a dwelling place which is equipped with bathroom (WC) and kitchen, either united with dwelling or separate unit with communal usage, which is the acquisition is financed through subsidized or not subsidized ownership house credit, which meet the following conditions: a. The area for each residence is more than 21 m2 and not more than 36 m2; b. The sale price for each residence is not more than Rp 144,000,000; c. It is intended for an individual person who has an income which is not more than Rp 4,500,000 per month and has had a Tax Identification Number (TIN); d. The construction refers to the Minister of Public Works Regulation on the technical requirement of simple condominium construction, and e. It is the first residence unit that is owned, used alone as a residence and is not transferred within a 5 years period of time since it is owned. 5. Sales Tax on Luxury Goods (Pajak Penjualan atas Barang Mewah/ PPnBM) Sales Tax on Luxury Goods is a tax which is imposed on the taxable luxury goods in the Customs Area (the Elucidation of Article 8 paragraph (2) of VAT Law). Under the Article 8 paragraph (1) of VAT Law, the Sales Tax on Luxury Goods tariff is set forth as the lowest of 10% (ten percent) and the highest of 200% (two hundred percent). The export of taxable luxury goods is imposed a tax with the 0% (zero percent) tariff. The Sales Tax on Luxury Goods tariff for luxury residential groups such as luxury house, apartment, condominium, town house, and a type similar to it is 20% (twenty percent). Sales Tax on Luxury Goods is imposed to only 1 (one) time when delivery of taxable luxury goods is performed by entrepreneur who produces or imports of taxable luxury goods. Under the Article 5 paragraph (1) of VAT Law, the Sales Tax on Luxury Goods is imposed to: a. delivery of taxable luxury goods which is performed by entrepreneur who produces the goods in the Customs Area in business or work activities; and b. import of taxable luxury goods. On delivery of taxable luxury goods by producer or on the import of taxable luxury goods, beside it is imposed a VAT, it is also imposed a Sales Tax on Luxury Goods on the consideration of: a. need a balance of taxation between low-income consumers and high-income consumers; b. need to control of consumption pattern of taxable luxury goods; c. need a protection of small or traditional producers; and d. need to secure a state revenue. Under the Minister of Finance Regulation Number 620/PMK.03/2004 on the Type of Taxable Luxury Goods besides motor vehicle which is imposed the Sales Tax on Luxury Goods, as amended by Minister of Finance Regulation Number 35/PMK.03/2008, as amended by Minister of Finance Regulation Number 137/PMK.011/2008, as amended by Minister of Finance Regulation Number 103/PMK.03/2009 on the Third Amendment of Minister of Finance Regulation Number 620/PMK.03/2004 on the Type of Taxable Luxury Goods besides motor vehicle which is imposed the Sales Tax on Luxury Goods, the Sales Tax on Luxury Goods in the form of: The restriction of the Sales Tax on Luxury Goods imposition is only imposed to the luxury residence groups such as luxury house, apartment, condominium, town house, and a type similar to it from non-condominium type with a building area of 350 m2 or more and from the type of condominium with a building area of 150 m2 or more. Alsha Alexandra Kartika
Criminal Act Related to Condominium
Criminal provisions related to condominium is regulated in Article 21 until Article 23 of the Law Number 16 of 1985 (“Law 16/1985”) on Condominium.
Article 21 paragraph (1) of Law 16/1985 regulates criminal sanction, that is stated, “Any person who is intentionally against the provisions of Article 6 of Law 16/1985, Article 17 paragraph (2) of Law 16/1985 and Article 18 paragraph (1) of Law 16/1985 shall be punished by a maximum imprisonment of 10 (ten) years or a maximum fine of Rp 100,000,000, – (one hundred million rupiah)”.
Further, in Article 21 paragraph (3) of Law 16/1985 regulates criminal sanction that is stated, “Any person by whose negligence causes infringement of the provisions as referred in Article 6 of Law 16/1985, Article 17 paragraph (2) of Law 16/1985 and Article 18 paragraph (1) of Law 16/1985, shall be punished by a maximum jail of 1 (one) year or a maximum fine Rp. 1.000.000,- (one million rupiah)”.
The provision of criminal sanction as referred in Article 21 paragraph (1) of Law 16/1985 is categorized as a crime. Whereas provision of sanction in Article 21 paragraphs (3) of Law 16/1985 is unlawful act.
In Article 22 of Law 16/1985 it is stipulated that, beside that imposed negligence criminal act as defined above, it must also comply with the provisions as referred in Article 6 of Law 16/1985, Article 17 paragraph (2) of Law 16/1985, Article 18 paragraph (1) of Law 16/1958. Under Article 23 of Law 16/1985, it is stated that, Government Regulation governing the implementation of law 16/1985 may contain punishment of jail of criminal act by maximum 1 (one) year and/or fine of Rp. 1.000.000.- (one million rupiah).
Criminal act in relation to Condominium that may be categorized as infringement and crime is any actions that are against provision in Article 6 of Law 16/1985, Article 17 of paragraph (2) of Law 16/1985 and Article 18 paragraph (1) of Law 16/1985 as follows:
1. Requirement of Technical and Administrative
The provision in Article 6 of Law 16/1985 stipulates that, the construction of Condominium shall meet the technical and administrative requirements. Furthermore, the provision of technical and administrative requirement are governed by Government Regulation. Technical requirement is defined as regulation concerning building structure, security, safety, health, convenience, and others related with the architecture, including the completeness of infrastructure and environmental facilities. While the administrative requirements are the business license of the company’s housing construction, permits of location and/or allocation, as well as building construction permit (IMB).
2. Implementation of Execution Mortgage and Fiduciary After Announcement and Notification
This provision is regulated in Article 17 paragraph (2) of Law 16/1985 which stipulates that, for the execution of mortgages and fiduciary in order to repay a debt, may only be performed after 1 (one) month after it is notified in writing to the parties concerned and published in two newspapers circulating in that area, and/or local print media, without any parties that claim the objections. Announcement and notification provisions of the obligation before the execution of mortgages and fiduciary are intended in this Law to protect the other parties’ interests.
3.Feasible Occupancy Permit
The provisions in Article 18 paragraph (1) Law 16/1985 regulates that, condominium units that have been built can be sold for occupancy after obtaining feasible occupancy permit from Government of the relevant region. Feasible occupancy permit is also
required for non-residential condominium. The provisions in this Article are intended to secure the safety, security and order of the tenants.
Sofie Widyana P.
Background
Construction service is one of the activities in the field of economy, social and culture which has important role in the achievement of various objectives to support the realization of the national development goals. Therefore, the implementation of construction services needs to be regulated to carry out the orderly of the construction work. Construction services are stipulated under the Law Number 18 of 1999 on Construction Services (“Law No. 18/1999”) and Government Regulation Number 29 of 2000 on Implementation of Construction Services (“PP No. 29/2000”) jo. Government Regulation Number 59 of 2010 on Amendment of PP No. 29/2000 (“PP No. 59/2010”).
In a construction work, there are 2 (two) parties that are involved , namely the service user and the service provider. The service user and service provider are bound in a working relation of construction services, provided that such working relation is set out in a construction work contract.
Construction Work Contract
Based on Article 1 of Law 18/1999, construction work contract is the overall document regulating legal relationship between the service user and the service provider to implement the construction work. Basically, the construction work contract is made separately according to the stages in the construction work, which consists of the construction work contract for the construction work planning, construction work performance, and construction work supervision.
Referring to Article 23 paragraph (6) of PP No. 29/200, the construction work contract is subject to the applicable law in Indonesia. The construction work contract is made in Indonesian language. In the event that the construction work contract with foreign parties, it could be made in Indonesia language and English language (dual language).
According to PP No. 29/2000, construction work contract is divided by:
forms of compensation, which consists of a lump sum, unit price, additional fee to the services, the combination of lump sum and unit price, or alliances;
period of the construction work, which consists of a single year, or multi-year;
terms of payment for the works, in accordance with the progress of the work, or at regular intervals.
As a minimum, a construction work contract shall include description on:
the parties, clearly stipulating their identities;
work description, clearly stipulating in detail of the work’s scope, work’s value, and performance period;
coverage and/or maintenance period, stipulating the provision of the period of coverage and/or maintenance which is the responsibility of the service provider;
experts, stipulating the provision of number, qualification, and classification of experts to perform the construction work;
rights and obligations, which is stipulating the provision of the rights of the service user to receive the results of the construction work and its obligation to comply with the agreed provisions, and also the rights of the service provider to get information and compensation, and its obligations to perform the construction work;
terms of payment, stipulating the provision of service user’s obligation in carrying out the payments for the results of construction work;
default, stipulating the provisions of responsibilities in the event either party fails to carry out its obligations as agreed upon;
dispute settlement, stipulating the provisions of the procedure of the settlement of dispute due to disagreements;
termination of construction work contract, stipulating the provisions of the termination of construction work contract, caused by the inability of either party to perform its obligations;
force majeure, stipulating the provisions of the circumstances arising beyond the intent or capability of the parties, which is inflicting losses to either party;
construction failure, stipulating the provisions of the obligations of the service provider and/or service user on the failure of a construction;
workers protection, stipulating the provisions of the parties’ obligations in the safety, occupational well-being, and social security;
environmental aspect, stipulating the provisions of the parties’ obligations to comply with the applicable environmental law.
Construction work contract also shall contain provisions on intellectual property right, which includes:
ownership of the planning result, based on the agreement, and
fulfillment of the obligations of the copyright on the planning result that has been owned by its holders and patent rights that has been owned by its holders, in accordance with the laws on copyright and the laws on patent.
Construction work contract may also contain the parties’ agreement on incentives, provided that the incentives may be in monetary form or other forms. Incentive is the award that is given to the service provider for his achievements, among others, the ability to finish the works earlier compared to the agreed period, while maintaining the quality as required as set out in the construction work contract.
Isrilitha Pratami Puteri
Indonesia’s high population growth rate has increased the housing needs of the people. Urgent needs of the available units of house often results on the sale and purchase of the house which is still in the planning process and it is giving rise to the sale and purchase through reservation. Therefore, as a result of it, the sale and purchase of house is conducted through a preliminary sale and purchase arrangement. The preliminary sale and purchase of house will be set out in the Conditional Sale and Purchase Agreement (“PPJB”). The PPJB shall be made in accordance with the guidelines which set out in the Minister of Housing Decree Number 09 Year 1995 on Guidance of Conditional Sale and Purchase of House (“Kepmenpera No.09/1995”) along with its example. Along with the enactment of the Kepmenpera No.09/1995, it is expected that the interests of the buyer and the seller will be secured.
The description of object of the PPJB are: (a) the size of the house building along with its architectural drawings, floor plans, and technical specifications of the building; (b) the area of the land, the land status, and all permits related to the construction of the house and its other rights, (c) the location of the land, (d) the house and land prices, and payment procedures agreed by the parties.
Seller’s Obligation
The obligations of the seller are to complete the construction within the agreed time period according to the PPJB. However, this obligation may be waived in the event that Force Majeure is occurred. Prior to the sales and/or conduct of the PPJB, the seller is required to have: (a) approval in principle of project plans issued by the local government and the location permit issued by the Regency/Municipality Land office. Especially for DKI-Jakarta, the seller shall obtain the license of land appointment and utilization (“SIPPT”), (b) letter of information issued by the Regency/Municipality Land Office which explains that the seller has obtained the land to develop the residential, and (c) Building Construction Permit.
In addition, the seller is also obliged to:
manage the registration of purchase of right of land and building;
represents that the land and the house building as the object (“Object”) of the PPJB is fully owned by the seller, and not engaged in any dispute and is not confiscated by the authority;
represents and release the buyer from any claim on both civil and criminal, which may arise in the future in relation to the Object;
take the responsibility for the existence of hidden defects that can only be known at a later stage, in accordance with the provisions of the Article 1504 and 1506 of Indonesian Civil Code;
bear the cost of the certificate registration process.
Buyer’s Obligations
The buyer is obliged to pay the total price of the Object, taxes, and other costs, the fees of the preparation of the notary deed, the expenses of the PPJB, the registration fees of the acquisition levy of land and building of the land on behalf of the buyer.
In the event there is a late delivery of the house building from the seller to the buyer at the agreed time as set out in the PPJB, the seller will be charged a penalty in the amount of 2%o (two per thousand) of the total price of the Object, for each day of the delay. The seller will also be considered to have authorized the buyer to manage the registration of the acquisition of the Object to the related authorities.
In contrast, the late payment of the installments and other costs by the buyer to the seller, the buyer will be charged a penalty in the amount of 2%o (two per thousand) of the total amount of the installments that is already due and payable for each day of the delay, which may result the unilateral cancellation of the PPJB by the seller.
Delivery of Object
The seller will deliver the building to the buyer together with the signing of the Minutes of Delivery of the Object (“BAST”) after the seller and the buyer have fulfilled all of their obligations. The seller shall notify the buyer in writing with regards to the intention of the delivery of the Object within 2 (two) weeks prior to the ceremony of the Object’s delivery. In the event that the buyer is not willing to sign a BAST within 2 (two) weeks, the buyer shall be deemed to receive the Object with all its consequences. If both parties have fulfilled their obligations before the time limit of delivery, the Object may be delivered from the seller to the buyer earlier.
Maintenance of Object
The seller is obliged to maintain the building within 100 (one hundred) day’s period after the BAST signing date. Repairs are carried out based on the project plan and the technical specifications as stipulated in the appendix of the PPJB. If the 100 (one hundred) days period has ended, the maintenance of the Object will be borne by the buyers. The seller shall be released from the responsibility to repair the Object if a Force Majeure is occurred, such as: earthquake, flood, riot, war, or the changes of the house building that was conducted by the buyer.
Assignment
Both seller and the buyer may assign their rights of the Object (“Right”) to the third party if the sale and purchase before the Land Deed Official (“PPAT”) has not been performed. The buyer may assign his Right to the third party, as long as the buyer agrees to pay the administration fee in the amount of 2,5% (two point five percent) of the total price of the transaction based on the seller’s written approval.
Termination
The PPJB shall not terminate by itself if either party has passed away. It may be terminated if the seller cannot deliver the Object on time and the Object is not in accordance with the floor plans and technical specification of building. As a result of it, the seller is obliged to return the money which has been received plus a penalty, interest, and other expenses.
The buyer may request for the cancellation of the PPJB if the buyer is unable to perform his obligation to pay the agreed price, to pay the installments to the bank as the lender, and the buyer has resigned for any reasons. On that condition, if the payment has not yet reached to 10% (ten percent) from the total agreed price, the money which has been paid will be the seller’s right. On a contrary, if the payment has already exceeded 10% (ten percent) from the total agreed price, the seller is entitled to deduct 10% (ten percent) of the total agreed price, and the remaining payment will be returned to the buyer.
Deed of Sale and Purchase
Deed of sale and purchase of the Object must be signed by the seller and the buyer in the presence of the PPAT if: (a) the house building has been completed and is ready for occupancy; (b) the buyer has paid the entire price together with the taxes and other costs and shall bring along the original receipt at the time of signing; (c) right to build application process has been fully processed and the certificate of Right to Build is already registered under the name of the the seller.
Dispute Settlement
The guidance of the PPJB of house is also addressed the settlement of disputes between the seller and the buyer. The parties shall settle the dispute that occurred in relation to the PPJB amicably. However, if there is no settlement, the parties may settle the dispute through the Indonesian National Arbitration Board (BANI). The costs that is incurred of the dispute shall be borne and paid by the parties in the same amount, namely 50% (fifty percent) and 50% (fifty percent).
Samuel Christian, SH
Background Nowadays, the the sale and purchase of unit(s) of condominium (the “Unit”) is growing rapidly, particularly the sale and purchase of the condominium which have not been completed yet, even when the condominium is still in the planning process. The...