Law Number 40 of 2007 on Limited Liability Company ("Company Law") only recognizes the classification of registered shares. However, Article 53 paragraph (1), (2) and (3) of Company Law states that, the Articles of Association may determine more than one...
Background Definition of Liquidation according to Kamus Besar Bahasa Indonesia is “the winding up of Company as a legal entities that includes the payment of obligation to all creditors and distribution of remaining assets to the shareholders (Company)”. The main...
Background International Center for Settlement of International Dispute (“ICSID”) was established on the basis of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1966 ("ICSID Convention"). This ICSID Convention...
This article discusses the Indonesian Capital Investment Coordinating Board Regulation No. 17 of 2015, which sets out the guideline and procedure for controlling capital investment operations, including definitions of capital investment, investor, and reporting obligations (LKPM).
Introduction
As we already have known, according to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), the granting of mortgage is conducted by making the Deed of Granting of Mortgage (“Deed”) by the Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/PPAT”) in accordance with the prevailing laws and regulations. It is also regulated in Law 4/96, particularly in Article 11 paragraph (2) that the Deed may stipulate some covenants, considering the effort to keep the good value of the mortgage object, especially at the time of the execution. The covenants are facultative, means that it has no effect to the validity of the Deed. The parties concerned are free to determine whether or not they will stipulate the covenants in the Deed. However, in the event that the parties concerned are stipulating the covenant in the Deed and registering the Deed at the land office, such covenants shall be binding to the third party.
Covenants Stipulated in the Deed
According to Article 11 paragraph (2) of Law 4/96, the covenants that may be stipulated in the Deed are as follows: [More…]
covenant which is limiting the competency of the mortgage provider to rent out the mortgage object and/or determine or change the lease term and/or receive the rent money in advance, unless with the prior written approval of the mortgage holder;
covenant which is limiting the authority of the mortgage provider to change the form or structure of the mortgage object, unless with the prior written approval of the mortgage holder;
covenant which is giving authority to the mortgage holder to manage the mortgage object according to the stipulation of chairman of the district court which jurisdiction covers the location of the mortgage object, in the event that debtor is in default;
covenant which is giving authority to the mortgage holder to save the mortgage object, if it is necessary for the enforcement of the execution or to prevent the abolishment or cancellation of the rights as the mortgage object, due to the non-fulfillment or violation of the provisions of law;
covenant that the first mortgage holder has the right to sell, on its own authority (power), the mortgage object if the debtor is in default;
covenant given by the first mortgage holder that the mortgage object will not be cleared from the mortgage;
covenant that the mortgage provider will not relinquish its right of the mortgage object without prior written approval of the mortgage holder;
covenant that the mortgage holders will acquire all or the part of the compensation received by the mortgage provider as the settlement of the loan concerned in the event that the mortgage object is released by the mortgage provider or revoked for public interests;
covenant that the mortgage holder will acquire all or the part of the insurance money received by the mortgage provider for the settlement of the loan concerned, if the mortgage object is insured;
covenant that the mortgage provider will vacate the mortgage object at the time of execution;
covenant that the certificate of land right(s) as the mortgage object will be held by mortgage holder.
Furthermore, Article 12 of Law 4/96 clearly expresses that if there is covenant which is giving the authority to the mortgage holder to own the mortgage object if the debtor is in default, such covenant is null and void. Such provision is stipulated in order to protect the interests of the debtors and other mortgage providers, especially if the value of the mortgage object exceeds the amount of the debt that is being collateralized.
Ivan Setiady
Background
Referring to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), particularly Article 10 paragraph (1), it is stated that the granting of mortgage is preceded by a covenant to provide mortgage as the security for settlement of certain debts, which is set out in and as an integral part of the debt (loan) agreement concerned or other agreement which causees such debt. Mortgage is accessoir, which means that the granting of a mortgage should be a follow-up of the principal agreements i.e. agreement that gives rise a legal relation of such debt in which its settlement is secured. Therefore, it can be said that the existence of a mortgage is always agreed upon and follow (accessoir) the principal agreement.
Settlement of Certain Debt
According to Article 3 paragraph (1) of Law 4/96, the debts, in which its settlement can be secured are as follows: [More…]
debt which is already existed at the time of the granting of the Mortgage;
debt which has not yet been existed but has been agreed.
Furthermore, it is also regulated that the amount of the debt which its settlement is secured with the mortgage can be determined at the time agreed (agreed in the related agreement) or determined at the time of the execution petition is filed, under the debt (loan) agreement or other agreement that give rise to the related debt relation.
Article 3 paragraph (2) of Law 4/96 states that the mortgage can be encumbered upon a debt due to a legal relation or upon one or more debts due to several legal relations. Based on that, Rachmadi Usman, S, H., M.H. interprets that the granting of a mortgage is possible upon:
several creditors who combine in providing loan to a debtor under a legal relation (loan agreement);
several creditors who provide loan to a debtor under several and different legal relations (loan agreement) for each creditors.
Ivan Setiady
Background
To maintain the sustainability of the national economic development, it needs large amount of funds. The more increase of development activities, the more of the needs of availability of funds, whereas such funds are mostly obtained through credit financing activities.
Considering the importance of the position of credit financing in the property development, it is reasonable enough for the creditor and the debtor and other related parties to obtain protection through an institution of security rights and who can provide legal certainty for all parties concerned, which can
encourage public participation in national development to realize
a prosperousand fair society. In order to realize that purpose, the government already arranged provisions in relation to such security rights, particularly for security rights of land as set forth in Law Number 4 of 1996 on Mortgage (Hak Tanggungan) along with Properties Related to the Land (“Law 4/96”).
Mortgage (Hak Tanggungan) of Land
In Article 1 of Law 4/96, a mortgage is a security right over right(s) of land, along with or without other properties that constitute a unity with such land, for the settlement of certain debts, which gives the preferred position to certain creditors against other creditors (“Mortgage”). Mortgage cannot be split, unless otherwise agreed in the Deed of Granting of Mortgage.
Rights of land that can be encumbered with Mortgage are right of ownership, right to cultivate, right to build, and right of use over state’s land (“Object”). An Object can be encumbered with more than one Mortgage in order to guarantee the settlement of more than one debt. If an Object is encumbered with more than one Mortgage, the rank (level) of each Mortgage is determined by the date of their registration at the Land Office.
Background
Mortgage (hak tanggungan) of land is a security right over right(s) of land, along with or without other properties that constitute a unity with such land, for the settlement of certain debts, which gives the preferred position to certain creditors against other creditors (“Mortgage”). In this regard, there are procedures for granting, registration and transfer of Mortgage as stipulated in Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”).
Granting of Mortgage
Granting of Mortgage is preceded by a promise or covenant to grant the Mortgage as the security of payment of certain debt, which is set out in and as an integral part of the related loan agreement or other agreements that cause such debt.
The granting of Mortgage is conducted by making the Deed of Granting of Mortgage by the Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/PPAT”) in accordance with the related prevailing laws and regulations. In the event that the object of the Mortgage is the right(s) of land which is derived from the conversion of the previous rights that have been eligible to be registered but the registration has not been done, the granting of Mortgage shall be conducted simultaneously with the application for the registration of such right(s) of land.
According to Article 11 of Law 4/96, a Deed of Granting of Mortgage must include:
name and identity of the holder and grantor of Mortgage;
domicile of the parties. If there are any party that is domiciled outside the territory of Indonesia, to such party, shall also be included a choice of domicile in the territory of Indonesia. In the case that the choice of domicile in the territory of Indonesia is not included, the territory of the Land Convenyancing Office where the Deed of Granting of Mortgage is made, is regarded as the chosen domicile;
the clear determination of the debt(s) which is secured by the Mortgage;
the value of the security;
clear description of the object of the Mortgage.
Registration of Granting of Mortgage
The granting of Mortgage shall be registered at the Land Office. PPAT shall deliver the Deed of Granting of Mortgage and the other warkah to the Land Office within a period not later than 7 (seven) business days after the signing date of such Deed of Granting of Mortgage. Registration of Mortgage is conducted by the local Land Office by making the land book of Mortgage and record it in the land book of such right of land (as the object of the Mortgage) and also copy such record into the certificate of right of land concerned.
As the evidence of the existence of the Mortgage, the Land Office will issue certificate of Mortgage in accordance with the prevailing laws and regulations (“Certificate”). This Certificate has the equal executorial power with the court decision which has permanent legal enforcement. The Certificate shall be delivered to the holder of the Mortgage.
Background
Condominium is a building built in an environment which is divided into parts that are functionally structured horizontally and vertically and consisting of units that can be owned individually and can be used separately, particularly for residence, which is completed with common equipment, common facility, and common land. In the condominium, there are private property managed by the owner himself and the common rights which should be used and managed together because it involves the common interest. Utilization and management of condominium and its environment should be arranged and conducted by the tenant association. There are some regulations on the tenant association, such as Law Number 16 of 1985 on Condominium (“Law 16/85”), Government Regulation Number 4 of 1988 on Condominium (“GR 4/88”), and Decree of State Minister of Public Housing Affairs Number 06/KPTS/BKP4N/1995 on Guidance on Making Deed of Establishment and Article of Association of Tenant Association of Condominium (“Decree”).
Tenant Association
According to Article 1 of Law 16/85, tenant association is an association which consists of tenants as its member. Article 19 of Law 16/85 states that tenants of condominium shall establish a tenant association, having the main task to regulate manage, and also to guarantee order, principle of mutual aid, and harmony based on the Indonesian personality, in order to manage the common equipment, common facility, and common land.
Tenant association, by the Law 16/85, is given the status as a legal entity with the deed of establishment and articles of association, therefore, the tenant association may act in and out on behalf of the owner, and with its authority, the tenant association shall realize the comfortability of the environment of the condominium in order. Establishment of tenant association should be executed with a deed that is legalized by Regent, Mayor Head of Region II, and especially in Jakarta, shall be legalized by the Governor Head of Special Capital City Region of Jakarta
Establishment Meeting
Refer to the Decree, it is stated that in the establishment of tenant association, firstly, the owner and/or tenant of condominium shall convene the meeting of establishment of tenant association (“Meeting”), and the result of such Meeting shall be stated in the minutes of Meeting. In the Meeting, it shall appoint some of the member/participant of the Meeting, and such member/participant shall be given the power of attorney to appear before the Notary to make all of the statements as the result of the Meeting. Furthermore, in the Meeting, without prejudice to the permission of the authorities, shall decide and arrange the article of association of the tenant association in accordance with the Decree.
On the tenant association, its membership was chosen based on the family principle by and for the member of tenant association through the general meeting of tenant association which held especially for that necessity, provided that the board of tenant association at least shall consist of a chairman, a secretary, a treasurer, and a management supervisor.
The person who can be the member of the tenant association is a legal subject who has, or use, or rent, or lease or utilize unit of condominium concerned, having status as a tenant. Establishment of tenant association is very important, because it has a main task and authority to manage and maintain the environment of the condominium, and arrange the regulation on tenancy rules. Membership of tenant association is based on the reality of occupancy, means that the person who can be a member of the tenant association are those who actually inhabit or occupy the unit of the condominium either on the basis of ownership or other legal relation. If the owner has not yet occupied, use or utilize the unit of condominium, thus, the developer becomes a member of the tenant association. If the developer of condominium is has not yet sold the entire of the units of the condominium, the developer shall act as a member of the tenant association.
Isrilitha Pratami Puteri