Articles

Illegal Occupancy of Land from the Criminal Perspective

The illegal occupancy of land is not a new event in Indonesia. The terms illegal occupancy can be interpreted as the act or condition of holding, possessing of rights or assets illegally, such as occupying a land or house, which is not belong to him, illegally (which is forbidden by law). The illegal occupancy of land is an unlawfully act that can be classified as a criminal offense. As we know, the prices of land are very stable and continue to rise along with the times. The illegal occupancy of land can be harming everyone, especially if the land is used for the business purpose. There are many cases that happened on the illegal occupancy of land, such as (i) physical occupancy of land, (ii) cultivation of land, (iii) sale of land, and so on.

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License for National Business Entities as the Construction Services Provider

Background

According to Law Number 18 of 1999 on Construction Services, construction services is consultancy services of construction work planning, services of construction work performance, and services of construction work supervision. Construction has a very important role in achieving various aims in order to support the objectives of national development. The construction services are carried out by the construction services provider, in the form of individuals or business entities, whereas such business entities are divided into 2 (two) classifications, that is, (i) national business entities; and (ii) foreign business entities. In order to perform the construction services, there are some requirements in order to obtain the business license of construction services that must be fulfilled by the business entities as the construction services provider (the “License”).

Regulations

There are some regulations that are related to the License for construction services provider in the form of national business entities (the “Business Entities”), such as:

Law Number 18 of 1999 on Construction Services;
Government Regulation Number 28 of 2000 on Business and Society of Construction Services Role (“PP 28/2000”) jo. Government Regulation Number 4 of 2010 on Amendment of PP 28/2000 (“PP 28/2000 jo. PP 4/2010”); and
Decree of Minister of Habitation and Regional Infrastructure Number 369/KPTS/M/2001 on Guidelines of Licensing for National Construction Service Business (“Kepmen 369/2001”).
Licenses

Each Business Entities shall have the business License issued by the Regional Government where the Business Entities are located. The License shall be obtained by the Business Entities in order to perform or conduct the construction services in all regions of Republic of Indonesia. The License which has been given to the Business Entities is valid for 3 (three) years and can be extended. According to Article 14 of PP 28/2000 jo. PP 4/2010, the License will be given to the Business Entities, which have fulfilled the requirements, such as:

(i) Have the registration certificate of business entities issued by the Certification Unit of Business Entities (the “Unit”) which is formed by the Agency of Construction Services Development (the “Agency”)

The registration means an activity in order to determine the competent of skill and expertise of the profession of the individuals or business entities; an activity in order to determine the business license in accordance with the classifications and qualifications which are embodied in the certificate issued by the Unit.

(ii) Completed the requirements provided by other prevailing laws and regulations related to the business activity.

The specific requirements in obtaining the License for the Business Entities are set out in Kepmen 369/2001. In order to obtain the License, the national business entities shall apply through certain form as stipulated in the attachment of Kepmen 369/2001 to the Regional Government, that is, Regent/Mayor or appointed Officer. The application shall be enclosed with:

(i) the copy of the business entities certificate that has been registered by the Unit;

(ii) the copy of the receipt of the application administration fee payment;

(iii) other administration requirements that is regulated by the Regional Government in accordance with the prevailing laws and regulations; and

(iv) each License will be given code number in accordance with the guidance of numbering of License as stipulated in the attachment of Kepmen 369/2001.

Other technical matters in relation to the granting of License are further stipulated by the Regional Government.

Sanction

In relation to the violation of License, the Regional Government Regulation shall stipulate the administration sanction in accordance with Article 35 paragraph 1 of PP 29/2000 jo. PP 4/2010, such as (i) written warning; (ii) suspension of business and/or profession license; (iii) revocation of business and/or profession license.

Helen Taurusia, SH

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Guidance on Conditional Sale and Purchase Agreement of House According to the Decree of State Minister Public Housing Affairs Number 09/KTPS/M/1995

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

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Guidance of Conditional Sale and Purchase Agreement of Condominium (Pedoman Pengikatan Jual Beli Satuan Rumah Susun) According to the Decree of State Minister for Public Housing Affairs Number 11/KPTS/1994

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...

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Legal Aspect of Construction Services According to Law No. 18 of 1999 – Indonesia

Construction services hold a very important and strategic role in achieving various aims in order to support the objectives of national development to realize a fair and prosperous society both materially and spiritually based on Pancasila and the 1945 Constitution. Therefore, it is necessary to arrange a specific regulation of construction services, which is now set under the Law Number 18 of 1999 on Construction Services (“Construction Services Law”).

Overview of Construction Services
Construction services is consultancy services of construction work planning, services of construction work performance, and services of construction work supervision. The parties in a construction work consist of service user and service provider. Construction services are carried out by the construction services provider, in the form of individuals or business entities. Construction services that carried out by individuals as the service provider can only perform the low risk construction work, with simple technology, and low cost. Meanwhile, the high risk construction work and/or high technology and/or high cost can only be performed by limited liability companies or the equivalent foreign corporations.

License for Construction Services Provider
Construction services provider in the form of business entities shall (i) comply with the provisions of business license in the field of construction services; (ii) possess certificate, classification, and qualification of a construction service company. A classification and qualification standard of proficiency is an acknowledgment of the proficiency level of every business entities both national and foreign in the field of construction services business. Such acknowledgment is obtained through a test(s) carried out by an institution assigned to perform it. The process of obtaining such acknowledgment is through a registration activity comprising classification, qualification, and certification. Therefore, only certified business entities that are permitted to work in the field of construction services business.

The business license of construction services has been further stipulated in Article 14 of Government Regulation Number 28 of 2000 on Business and Society of Construction Services Role (“PP 28/2000”) jo. Government Regulation Number 4 of 2010 on Amendment of PP 28/2000 and Decree of Minister of Settlement and Regional Infrastructure Number 369/KPTS/M/2001 on Guidelines of Licensing for National Construction Service Business.

Construction Work Binding
Binding in construction services work relationship is established based on the healthy competition principle in the selection of service provider through public or limited tender, and in certain conditions, the selection of service provider may be carried out through direct selection or direct appointment. The selection of service provider shall consider the conformity of field business, the balance between capability and workload, and performance of the service provider. Business entities owned by the same person or a group or in the same management are not entitled to join the tender for one construction simultaneously. The procedure of service provider selection has been further stipulated in Government Regulation Number 29 of 2000 on Construction Services Performance (“PP 29/2000”) jo. Government Regulation Number 59 of 2010 on Amendment of PP 29/2000.

Construction Work Contract
The regulation of work relationship between the service user and the service provider shall be set forth in a construction work contract. A construction work contract is made in Bahasa Indonesia and with regards to construction work contract with foreign parties, it could be made in Bahasa Indonesia and English.

As a minimum, a construction contract shall consist of description on (i) the parties; (ii) work description; (iii) liability and/or maintenance period; (iv) experts; (v) rights and obligations; (vi) terms of payment; (vii) event of default; (viii) dispute settlement; (ix) termination of the construction work contract; (x) force majeure; (xi) construction failure; (xii) workers’ protection; (xiii) environmental aspect. In relation to construction work contract on planning works, it shall contain provision of the intellectual property rights.

The description of work description comprises scope of work, work value, and the performance time limit. The scope of work comprises (a) work volume, is the amount of work to be performed; (b) administrative requirement, is a procedure that had to be complied with by the parties in conducting interaction; (c) technical requirement, is the technical provisions that had to be complied with by the service provider; (d) liability or guarantee, is a form of protection, among others for work performance, receipt of the down payment, accidents of workers and the society; (e) report of the result of construction work, is the result of work progress set forth in a written document.

Value of work, is the amount of costs to be received by the service provider of the performance of the entire work scope. The performance time limit is the period of time to complete the entire work scope including the maintenance period.

The Society and the Construction Services Society Roles
The society has roles in the performance of construction work, such as (i) supervising, to realize the orderly performance of construction work; (ii) receive a reasonable compensation for losses that occurred directly due to the performance of such construction work; (iii) maintain order and comply with the prevailing provisions in the aspects of construction work performance; (iv) participate in preventing any construction work that endangering the public interest.

The construction services society is a part of the society having its interests and/or activities related to construction services business and work. The construction services society is carried out through a construction services forum, performed by an independent and self reliant institution. Such forum has and upholds their code of professional ethics. The role of the construction services society has been further stipulated in PP 4/2010.

The Government Role
The government also has a role in the performance of construction work, that is conducting the development of construction services. Such development is carried out in the form of regulating, empowering, and supervising. The regulating function is carried out by issuing laws and regulations and technical standards. Meanwhile, the empowering function is performed on construction services business and on the society in order to develop its conscience of rights, obligations, and its roles in the performance of construction services. Furthermore, the supervising function is performed on the performance of construction work in order to ensure the realization of orderly construction services in accordance with the prevailing laws and regulations. The performance of the development may be carried out together with the construction services society. Such development has been further stipulated in Government Regulation Number 30 of 2000 on Performance of Construction Services Development.

Class Action
There is a possibility that the society suffers losses due to the performance of construction work. Therefore, the society has a right to file a class action. A right to file a class action means a right of a small group of the society to act on behalf the society in large numbers that has suffered losses, based on the same issues, legal factors, and conditions due to the losses or disruption as the result of the construction work performance.

Sanction
The administrative sanctions may be imposed for the violation of Construction Services Law, in the form of (i) written warning; (ii) temporary termination of construction work; (iii) restriction of business activities and/or profession; (iv) temporary prohibition on the use of the construction work result (limited to the services user); (v) suspension of business and/or profession license; (vi) revocation of business and/or profession license. In addition to the administrative sanctions, the performer of the construction work may be subject to a sentence of a maximum 5 (five) years imprisonment or subject to a fine sanction in a maximum of 10% (ten percent) of the contract value.

Helen Taurusia, SH

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Building Construction Permit in Jakarta

Background

As the capital city of state of Indonesia, Special Capital Region of Jakarta (“Jakarta”) is a center of economic and trade center in Indonesia, which located in the west island of Java. Furthermore, as the central of government of Indonesia, Jakarta is also occupied by buildings that serve as the center of government offices, residential homes, and places of business. Aside to having been regulated on the laws and regulations on building structure establishment permit, and regulations pursuant to buildings and structures, buildings in the Jakarta area are specifically regulated in the Regulation of Jakarta Special Capital City Region Number 7 of 1991 on Building in the Special Capital City Region of Jakarta (“Regulation of DKI No. 7 of 1991”).

Building Construction Permit

The building constructions in Jakarta area can be conducted by firstly obtaining its permit from the Governor of the Special City Region of Jakarta (“Governor”), in the form of Building Construction Permit (“IMB”). The IMB application shall be made by written form to the Governor and submitted through the Section of Sub-District Office (Seksi Dinas Kecamatan) or Department of Sub-District Office (Suku Dinas Kecamatan). The Governor may refuse the IMB application, if the construction of building (i) is violating or harming the public interest, (ii) would harm the interest of local communities, such as endangering the health or environment harmony, and, (iii) has not perform the written instruction, as the condition of application process. The IMB shall be revoked, if the building construction has not been implemented within a period of 6 (six) months from the issuance of the permit, or in the event of the building construction is not continued, except it is notified by written notice by the permit holder.
Prior to the issuance of IMB, Section of Sub-District Office or Department of Sub-District Office may issue the Preliminary Permit (Izin Pendahuluan). Preliminary Permit is the permit which is given to build, accordance to the stages of building construction activities, while waiting the definitive permit. Preliminary Permit is specifically regulated in the Decision of Governor of the Special Capital City Region of Jakarta Number 76 of 2000 on the Procedures on Obtaining Building Construction Permit, Building Utilizing Permit (Izin Penggunaan Bangunan), and Building Utilize Feasibility (Kelayakan Menggunakan Bangunan), Governor Regulation of the Special Capital City Region of Jakarta Number 85 of 2006 on the Issuance Services of Building Construction Permit, Decision of Governor of the Special Capital City Region of Jakarta Number 147 of 2000 on the Delegation of Authority Service of Determination of City Plan and the Issuance of Preliminary Permit of Building Construction in the Province to Sub-District Office in Special Capital Region of Jakarta Province, as far as on the Issuance of Preliminary Permit on Building Construction.

Preliminary Permit is divided into 4 (four) parts, i.e. Preparation Preliminary Permit (Ijin Pendahuluan Persiapan), Comprehensive Preliminary Permit (Ijin Pendahuluan Menyeluruh), Comprehensive Structure Preliminary Permit (Ijin Pendahuluan Struktur Menyeluruh), and Foundation Preliminary Permit (Ijin Pendahuluan Pondasi).

Building Construction

Each building shall comply with the administrative and technical requirements in accordance with the function of the building. Having specifically regulated in the regional regulation of Jakarta, the technical and administrative requirements of building are also guided by other regulations on building structure, for example, Law Number 28 of 2002 on Building, Regulation of the State Ministerfor Public Works Number 24/PRT/M/2007 on Technical Guidelines for Building Construction Permit, Regulation of the State Minister for Public Works Number 29/PRT/M/2006 on Guidelines of the Technical Requirements of Building Structure, and Regulation of Minister of Home Affairs of Republic of Indonesia Number 32 of 2010 on Guidelines of the Issuance of Building Construction Permit.

The administrative requirements of the building consists of (i) the status of the rights of the land, (ii) the status of building ownership, and (iii) the IMB, while the technical requirements of the building contains, (i) the requirements of building structure, and (ii) the reliability requirements of building. The building construction in Jakarta area should be conducted by contractors and supervised by the Supervisory Director. The Supervisory Director is a person or a group of experts/entities which is charged to supervise the implementation of building construction activities upon the appointment of the building owner, in accordance with theprovision that is stipulated in the building permits. To perform their duties, Supervisory Director should have a work permit and responsible for the implementation of building construction activities.

Furthermore, having already supervised by Supervisory Director, all the construction activities in Jakarta area was also monitored by the Supervision Department of City Development (Dinas Pengawasan Pembangunan Kota). Supervisory Director of a building construction has an obligation to report each result of stage of its construction activities to the Head of Supervision Department of City Development. Each design and construction plan shall comply with the technical requirements, which also considering the security, safety, the suitability of building and environment from the side of architecture, construction, installation and building equipment, including safety on the fire prevention.

Design or building plan shall be made and accountable by the experts that have aduty to designing and planning the building and obtaining a written work permit from the Governor. Plan Drawing and Building Planning consists of (i) architectural drawing plan, and/or (ii) drawing and structural calculation, and/or (iii) drawing and its installation calculation and equipment of building, and/or, (iv) drawing and another calculation which have been fixed. The Expert who had a duty to design and plan the drawing and structure calculation, should had to adjust its drawing and structure calculation, and shall not deviate from the architectural drawing. The building owner is having an obligation to inform the Head of Supervision Department of City Development in case there are replacements of the designer and/or building planning.

Criminal Provisions

The violation of any provisions stipulated in Regulation of DKI No. 7 of 1991 is subject to the imprisonment with maximum 3 (three) months, or fine in amount up to IDR. 50,000 (fifty thousand Rupiah), by or by not seizing or confiscating the equipment, which has been used to commit the violations of the provisions. In addition to the penalties above-mentioned, Governor may determine penalties in order to penalize the violations.

Ivor Ignasio Pasaribu

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