Building Ownership
Legal Sanction that may arise due to the use of Building prior to Obtain Certificate of Feasible Function (“SLF”)

Legal Sanction that may arise due to the use of Building prior to Obtain Certificate of Feasible Function (“SLF”)

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Under Article 1 number 16 of Local Regulation of DKI Jakarta Number 7 of 2010 on Building (“LR No. 7/2010”), Certificate of Feasible Function (“SLF”) is a certificate which is granted by Local Government against the building that has been completed and has met the requirement of feasibility function based on examination’s result of building’s feasibility function as a requirement to be utilized.

Under Article 237 paragraph (1) of LR No. 7/2010, any person prior to utilization of building shall have SLF. SLF is granted to building which has been completed, met the requirement of reliability and feasibility function of building, and its use function has to comply with Building Construction License (“IMB”).

Legal sanction that may arise if using the building prior to obtain SLF is regulated in Article 283 paragraph (2) of LR No. 7/2010, as follows:

“Every building owners, building users, service providers of building construction who violate the provisions on Article 13 paragraph (3), Article 15 paragraph (1), Article 124 paragraph (3), Article 183 paragraph (1), Article 186 paragraph (4), Article 188 paragraph (1), Article 191, Article 192, Article 195, Article 231 paragraph (1), Article 237 paragraph (1), and Article 245 paragraph (1) are punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).”

In the criminal provision, there is an article which is related to SLF, namely Article 237 paragraph (1). Therefore, it can be concluded that any building owners, building users, service providers of building construction who do not have SLF when utilizing the building, shall be punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).

Alsha Alexandra Kartika

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Summary of the Local Regulation of DKI Jakarta Number 7 of 2010 on Building

Summary of the Local Regulation of DKI Jakarta Number 7 of 2010 on Building

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Background
The Province of DKI Jakarta is the one of the biggest city in Indonesia. As the capital city of Indonesia, DKI Jakarta provides various kinds of service to the public. One of its services is related with building development licenses. As an effort of doing servicing, structuring, supervising, and publishing of physical activity and administrative matter of the implementation of building in DKI Jakarta, the Local Government (Pemerintah Daerah) has set out the regulation of building in DKI Jakarta, with the issuance of Local Regulation Number 7 of 1991 (“LR No. 7/1991”).
Along with the times, the Indonesia Government has set out regulation on Building, namely Law Number 28 of 2002 on Building (“Law No. 28/2002”). The enforcement of Law No. 28/2002 causes amendment of LR No. 7/1991. LR No. 7/1991 is amended by the Local Regulation of DKI Jakarta Number 7 of 2010 on Building (“LR No. 7/2010”) which is valid since 5 November 2010.

Classifications of Building
Building function is classified based on:
a. Complexity level, which includes simple building, not simple building, and special building.

b. Permanence level, which includes permanent building, semi permanent building, and emergency or temporary building.

c. fire risk level, which includes building with a high level, medium level, and low level of fire risk.

d. earthquake zoning level which is set forth by the authorized agency.

e. location, which includes buildings in solid location, medium location, and tenuous location.

f. height, which includes high level building, medium level building, and low level building.

g. ownership, which includes state-owned building, business entity building, and individual building.

Right of Land Status

Any person who would construct the building must have a clear status of ownership land. For the building that is constructed on land owned by other parties, they shall obtain Land Utilization Permit (Izin Pemanfaatan Tanah) from the holder of right of land, in the form of a written agreement, containing at least the following:
a. rights and obligations of the parties;
b. area, location and boundary of land;
c. the function of building; and
d. the period of land utilization.

Building Ownership Status

Any person who owns some part of the building or whole building, shall have the evidence of building ownership which is issued by Local Government, except for the special function building by the Government. In order to issue the evidence of building ownership, each building shall have Building Construction License (“IMB”) and Certificate of Feasible Function (”SLF”).
In one building, it may be given more than 1 (one) evidence of building ownership. The evidence of building ownership may be owned by different owners and it is able to be transferred to other parties. In the matter of the building owner is not the land owner, the transfer of right shall obtain the approval from the land owner.

Requirement for the Issuance of IMB

Any person who would construct the building shall have IMB. IMB may be issued either in permanent or in temporary period of time and it may be given gradually. In order to obtain the IMB, each person shall submit the written application to the Head Office (Kepala Dinas) by attaching the minimum requirements as follows:
a. the evidence of land ownership status or the evidence of agreement;
b. Land Utilization License from the land owner;
c. identity/data of building owner;
d. technical plan of building, and
e. the result of environmental impact analysis for the building that makes a significant impact to the environment.

IMB is issued with the maximum period of time at least 30 (thirty) days since the approval of technical plan document is granted. The application of IMB that has qualified the administrative and technical requirements is approved and legalized by the Local Government. The Chief of Local Government may suspend the IMB establishment process or refuse the IMB application which does not meet the requirements.

Requirement for the Issuance of SLF

SLF is granted for building which has been completed, meeting the requirements of reliability of building and feasibility function, and the function of its utilization is in accordance with the IMB. SLF may be granted gradually in accordance with work level that has completed based on the written application. The examination of feasibility function of building based on the granted IMB, includes:
a. the compatibility of function;
b. layout of building;
c. safety;
d. health;
e. comfort, and
f. ease.

Requirement for the Issuance of Evidence of Building Ownership (Bukti Kepemilikan Bangunan Gedung)
In the matter to obtain an evidence of building ownership, each person shall submit the written application to the Chief of Local Government by attaching the administrative requirement, containing at least the following:
a. agreement and/or approval from both parties in the form of a written agreement;
b. IMB;
c. the suitability of actual data (the latest) with data in the document of right of land status, and

d. the suitability of actual data (the latest) with data in the IMB, and/or document of building ownership status that has existed/owned.

For building that has more than 1 (one) evidence of building ownership, the owner shall attach a written agreement containing at least:
a. rights and obligations of the parties;
b. area, location and boundary of land;

c. the function of building; and

d. the period of land utilization.

The evidence of building ownership is issued with the maximum period at least 30 (thirty) days since the application meet the requirement. The validity period of evidence of building ownership is based on the validity period of deed of land and/or written agreement. The application of evidence of building ownership may be deferred or rejected if it does not meet the requirements.

Requirement for the Environmental Impact Assessment
Every building plan which may cause the important environmental impact assessment shall have an environmental impact analysis. The building plan which does not cause the environmental impact shall have document of environmental management effort and environmental monitoring effort or statement of environmental management.

Administrative Sanction
Every building owner, building user, service provider of building construction, building manager who does not fulfill the obligation of function, and/or the requirement, and/or the providence of building, will be imposed administrative sanction that may include:
a. written warning;
b. restriction of construction activity;
c. temporary or permanent termination on the implementation of development;
d. temporary or permanent termination on the building utilization;
e. freezing of IMB;
f. revocation of IMB;
g. freezing of SLF;
h. revocation of SLF;
i. IPTB (Izin Pelaku Teknis Bangunan) freezing;
j. decreasing of IPTB’s level
k. revocation of IPTB;
l. revocation of the approval of discharging technical plan;
m. freezing of the approval of discharging technical plan;
n. fines; or
o. clearance of building order.
The types of sanction are determined by major and minor violations that have been performed.

Criminal Provisions
Every building technical party who violates the obligations, responsibilities, and prohibitions, shall be punished with a maximum criminal confinement of 3 (three) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).
Any building owner who does not have IMB and SLF as a requirement of the issuance of evidence of building ownership, who is constructing without having the IMB, who does not have SLF when they want to utilize the building, and who does not have the evidence of building ownership, shall be punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).

Transitional Provisions
After the LR No. 7/2010 comes into force, then:
a. The license application which is submitted and approved prior to the date of enactment of LR No. 7/2010 and it is still in the settlement process, is processed under the LR No. 7/1991;

b. IMB that has been issued under the LR No. 7/1991 but the related permit has not been issued yet, then the applicable regulation is LR No. 7/1991;
c. the building that has been established, but it has not obtained IMB yet when the LR No. 7/2010 is valid, to apply the IMB it shall obtain the SLF ; and
d. as long as the implementing regulation of LR No. 7/2010 has not been issued yet, then the existing implementation regulation is still valid as long as it is not in contrary to the LR No. 7/2010.

Alsha Alexandra Kartika

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The Legal Status of Parking Space Under Condominium Law

The Legal Status of Parking Space Under Condominium Law

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Condominium is a multilevel building which is built in an area that is divided into sections which are structured functionally, whether horizontally or vertically that constitutes as units in which each can be owned and used separate
ly, mainly for housing complemented with common equipment (bagian bersama), common facility (benda bersama) and common land (tanah bersama). Condominium is regulated in the Law Number 20 of 2011 on Condominium (“Law No. 20/2011”).

Land on where the building of Condominium stands is a common land. According to the law, common land is a piece of land used under an undivided common right, which is a Condominium building over it, determined in accordance with the building license.

According to Article 1 point 5 and 6 of Law no. 20/2011 common equipment is part of Condominium that is undividedly owned for common use, in a unified function of a Condominium. The examples of these are foundation, column, wall, floor, block, roof, stair, pipes, electricity system, gas, telecommunication and public area of a Condominium. Then, common facility is defined as a thing that does not form part of a Condominium, but jointly owned undividedly, for common use. The examples of these are park, landscaping, social building, religious building, playground, and parking space which is separated or integrated with the structure of Condominium building. Accordingly, based on the definitions set out above, of parking space is regarded as a common facility .

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Establishment of the Tenant Association of Condominium

Establishment of the Tenant Association of Condominium

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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

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Acquisition Levy of Right of Land and Building

Acquisition Levy of Right of Land and Building

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Background
As we all know, earth, water, and natural resources contained therein controlled by the State and used as much as possible for the prosperity of the people (society). Land and buildings that build on it, in addition to fulfill the basic need, is also constitutes as profitable investment equipment. In other words, land and building have economic value. Therefore, it is reasonable that for those who obtained the right of land and the buildings to give some of the economic value that obtained, to the State through tax payments, especially Acquisition Levy of Right of Land and Building (“BPHTB”). BPHTB is now regulated in Law Number 21 of 1997 on Acquisition Levy of Right of Land and Building (“Law No.21/1997”), as amended by Law Number 20 of 2000 on Amendment of Law No.21/1997 (“Law No.20/2000”).

BPHTB
According to Law No.20/2000, it is stated that BPHTB taxes are imposed on the acquisition of rights of land and/or building. The subject of BPHTB is the individual or entity who obtained rights of land and/or building. The object of BPHTB is associated with the obtainment of right of land and/or building. The obtainment of right of land and/or building consists of:
a. transfer of right due to: sale and purchase, exchange, grant, grant bequest, inheritance, income in the company or other legal entity, resulted in the separation of rights of passage, the appointment of buyers in the auction, the implementation of judgments that have permanent legal force, mergers, consolidation business, business expansion and gifts.
b. conferral of new right due to the continuation of releasing of right, and other than releasing of right.
The rights of land that are subject to BPHTB are Right of Ownership, Right to Cultivate, Right to Build, Right of Use, Right of Ownership on Strata Title, and Right to Manage.
The taxable objects which are exempted from BPHTB shall be the taxable objects that are obtained by:
a. diplomatic representative, consulate based on reciprocal principle;
b. state for performing governmental duties and or development activity for public interests;
c. international organization or representatives of international organization as stipulated by the Minister Decree provided that they neither run business nor do other activities other than their functions and duties;
d. individual or entity due to right conversion or due to other legal acts without any change of name;
e. individual or entity due to endowments;
f. individual or entity for religious service usage.

Acquisition Value
According to Article 5 of Law No.21/1997, the tax rate of BPHTB is in the amount of 5% (five percent) of Acquisition Value of Taxable Object (“NPOPKP”). NPOPKP is the acquisition value of tax object (“NPOP”) reduced with the Acquisition Value of Non-Taxable Object (“NPOPTKP”).
The base of BPHTB imposement is the NPOP. BPHTB is applied for the transaction that exceeds the NPOPTKP, in which is determined regionally, with the maximum amount of Rp 60.000.000,- (sixty million Rupiah), with the exception of the acquisition of rights due to inheritance, gift, bequest which received by person/individual in the direct lineage one degree up or down with the grantor, including husband or wife, in which that the NPOPTKP is regionally determined with the maximum amount of Rp 300.000.000,- (three hundred million Rupiah).
The amount payable of BPHTB is calculated by multiplying the tax rate of BPHTB with NPOPKP.

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Condominium on the Land with Right to Build over the Land with Right of Management

Condominium on the Land with Right to Build over the Land with Right of Management

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Background

Article 7 paragraph (1) and (2) of Law Number 16 of 1985 on Condominium, the developer (the “Developer”) may build a condominium over the land with Right of Management (Hak Pengelolaan) (“HPL”). HPL is a right to control, given by the state which the implementation is delegated to its holder. Rights of land that may be granted over the HPL land are Right to Build (Hak Guna Bangunan) (“HGB”) and Right of Use (Hak Pakai) (“HP”). The Developer is obligated to complete the HGB or HP status of the land prior to the initial offer of any property over the land, in accordance with the prevailing laws and regulation. Therefore, the Developer must be aware of the procedure of the obtaining of such rights and other requirements related to HGB and HP over HPL land, which is set out in the Government Regulation Number 40 of 1996 (“GR 40/1996”) and State Minister of Agrarian/Chief of National Land Agency Regulation Number 9 of 1999 on Procedure of the Granting of Rights of Land and Revocation of Right of State Land and Right of Management (“Regulation 9/1999”).

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Legal Aspects of Building in Indonesia

Legal Aspects of Building in Indonesia

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Buildings are made to support people’s need of spaces. Building has many functions such as work space, business place, education place, recreation place and many more. In developing countries, especially for small countries, building is used to maximize the use of spaces.

In Indonesia, building is regulated in the Law No. 28 of 2002 on Building (“Law of Building”). According to Law of Building, the definition of building is a physical form of construction works which integrate with the land it stands on, partly or wholly stands over and/or under ground or water, having a function as a place for people to do their activities, either for residence or place to live, religious activity, business activity, sosial activity, culture or any specific activity.

Construction of building is held with the principle of utility, safety, balance, also the harmony between building with its environment. The regulation for building is intended for:
1. Materializing a functional building and suitable with the construction building order which is harmonious and balance with its environment;
2. Materializing an orderly execution of building that ensures technical reliability in terms of safety, health, comfort, and convenience.
3. Materializing a legal certainty in the execution of bulding.

As for building function, according to Paragraph 1 of Article 5 Law of Building, building functions consist of residential function, religious, business, social and cultural, as well as special function. Paragraph 7 of Article 5 stipulated that one building can have more than one function.

Basically, Law of Building is regulating the requirements of a good and fully functional building. As for the implementing regulation of Law of Building is Government Regulation No. 36 of 2005 on Implementing Regulation of Law No. 28 of 2002 on Building (“GR No.36 of 2005”).

The purpose of GR No. 38 of 2005 is to materialize the implementation of orderly buildings, both administratively and technically, in order to materialize a building that is functional, reliable, which ensures safety, health, comfort, and ease of use, and balance and in harmony with its surroundings.

Some of the provisions in GR No. 38 of 2005 still need guidance and technical standard as the guidance to construct buildings. To do so, Minister of Public Works issued the Minister of Public Works Regulation No. 29/PRT/M/2006 on Guidance on Building’s Technical Conditions (“Minister Regulation”). This regulation includes everyone so that every party, person, legal entity and also government body, in constructing building shall fulfil the technical conditions set out in the Minister Regulation.

Retno Anggraeni

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Legal Status of a Property over the Right to Manage

Legal Status of a Property over the Right to Manage

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Not all land has a pure rights over land. There is a Right to Manage (Hak Pengelolaan Lahan – HPL) over some lands, like in some areas in DKI Jakarta, for example Senayan, Kemayoran, Pulomas, etc.

HPL is not a right over land and is not regulated in the Agrarian Law but it is regulated in the Goverment Regulation No.8 of 1953 on Control Over State Lands and Agrarian Minister Regulation No. 9 of 1965 on the Implementation of the Conversion of Control Over State Lands and Provisions on the Subsequent Policy.

HPL object is agricultural land and non agricultural, whereas the subject or the holder of HPL in general is Provincial Government (“PEMDA”), State-owned Corporation (“BUMN”), and Provincial-owned Corporation (“BUMD”) according to the goverment regulation as referred above.

HPL has no ownership period and is given only on state land controlled by PEMDA, BUMN, and BUMD with the purpose to control zoning and land use, so it is suitable with its zoning plan.

HPL is essentially a right concerning authority as stated in Article 1 paragraph 1 Regulation of the Minister of Domestic Affairs No.1 of 1977 on the Application Procedure and Resolution of Grant of Rights Over Parts of the Right to Manage and its Registration, as follows:
to plan the use of the land;
to use the land for the purpose of implementing its business;
to deliver some parts of the land to the third party, according to the requirement specified by the rights holder company, which includes its purpose, use, time period and financial, provided thatthat the grant of right of the land is conducted by the authorities, in accordance with the applicable laws and regulation.
Some kinds of rights of land such as Right to Build (HGB), Right to Cultivate (“HGU”), Right to Use (“HP”) can be issued over the HPL, but in practice and in accordance with Article 7 paragraph (2) of Law No.16 of 1985 on Condominium, a Right to Build is more often issued over HPL based on the agreement between the holders of HPL and the third party. For example, a Right to Build is issued over HPL with a purpose of building an apartment for residence. Therefore, every Rights to Build granted to third party must be approved by the HPL holder and as long as there is no change of use of a HPL land, then such approval shall be granted to third party. Thus, it is clear that an approval serves as a control function and is not an absolute authority from HPL holders.

Ivan Ari

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