Real Estate
Land Registration Activity

Land Registration Activity

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Background

Definition of land registration in Government Regulation Number 24 of 1997 on Land Registration (“GR 24/1997”) constitutes perfection of scope of the land registration based on Article 19 paragraph (2) of Law Number 5 of 1960 on the Principles Provision of Agrarian (“Agrarian Law”) which includes; measurement, mapping, land records, registration and transfer of right of land and granting of evidence instrument of right as strong evidence.

Further provisions of land registration activities are regulated in GR 24/1997, which include:

1. Land Registration for the First Time ( Opzet or Initial Registration)

Land registration for the first time is the activity of land registration for the object of land that has not been registered based on Government Regulation Number 10 of1961 (“GR 10/1961”) or GR 24/1997. Land registration for the first time is performed through land registration systematically and sporadically. Land registration systematically is defined as activity of land registration for the first time simultaneously including all object of land registration that has not been registered in area or part of area of a rural/village (Article 1 paragraph 10 GR 24/1997). While, land registration sporadically is land registration activity for the first time concerning one or some object of land registration in area or part of area of a rural/village (Article 1 point 11 GR 24/1997).

Land registration activities for the first time, include:

a. Collecting and processing of physical data

1. Preparation of base map registration;

2. Registration of land boundary areas;

3. Measurement and mapping of land areas and making registration map;

4. Preparation of land registers;

5. Preparation of letter of measurement;

b. Evidence of rights and its records, including:

1. evidence of new rights

2. evidence of old right

c. The maintenance of land registration data activities.

d. Presentation of the general register and document

e. Activity of land registration data maintenance.

2. Maintenance of Land Registration Data Activities (Bijhouding atau Maintenance)

This is the land registration activity to adjust the physical data and juridical data in maps of registration, land register, name register, letter of measurement register, land records, and certificate with the changes that happen later on (Article 1 point 12 of GR 24/1997).

Based on Article 36 of GR 24/1997, the maintenance of land registration data is performed if there is a change of physical data or juridical data of land registration object that has been registered. Physically data changes occured if there is segregation, separation, or merging of areas of land that have been registered. Juridical data changes occured for instance if there is an encumbrance or or transfer of right over of land areas that have been registered.

The relevant right holder shall register the change of physical data or juridical data to the Land Office and the district/local city to be recorded in the book of land.

Activity of maintenance of land registration data, includes:

a. Registration of transfer and imposition of rights.

1. Transfers of right through auction;

2. Transfer of right due to inheritance;

3. Transfer of right due to merger or

consolidation or merger of limited

liability companies or cooperative;

4. Imposition of right;

5. Rejection of registration transfer and

imposition of right.

b. Registration of change of other land registration data, including:

1. Extension of the period of right of land;

2. Segregation, separation, and merging

of area of land;

3. Distribution of joint right;

4. Abolishment of right of land and ownership rights of condominium units.

5. Transfer and abolishment of mortgage;

6. Changes of land registration data based

on judgment or court decision.

7. Changes of name

Sofie Widyana P.

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Criminal Act Related to Condominium

Criminal Act Related to Condominium

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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.

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Obligations of Paying Service Charge by The Owner of Condominium Units

Obligations of Paying Service Charge by The Owner of Condominium Units

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Each member of association of owners and tenants of Condominium units (“PPPSRS”) has rights and obligations in relation to management of Condominium units. This membership is represented by householder and shall become effective since recorded in the list of tenants and/or have been domiciled in Condominium units which held by them in accordance with the applicable provisions.

Article 16 paragraph 2 point b Government Regulation Number 4 of 1988 on Condominium (“GR 4/1988”) regulates that, every tenants of Condominium is obligated to pay service charge. The service charge is derived from PPPSRS which is collected by the association or the management board in accordance with the terms that have been agreed between administrator and management board or under the Article of Association or by By-Laws of tenants.

This service charge is the responsibility of owner, unless the owner has transferred it to the tenant. Article 74 paragraph (2) of Law Number 20 of 2011 on Condominium (“Law 20/2011”) states that, PPPSRS consists of the owner or tenants who obtain the authority from the owner of the Condominium unit. The authority from the owner to tenant is limited to tenancy, for example, in determining the amount of service charge for the management of safety, cleanliness, or social community.

Service charge for each Condominium units is calculated from the total cost of the daily management of Condominium units within the budget set by PPPRS. The costs are covered jointly by the owner of Condominium units based on Proportional Value Comparison of Condominium units.

Any Condominium units’ tenant who violates Article 16 paragraph 2 point b of GR 4/1988who does not fulfill the obligation to pay service charge is categorized as unlawful act. As regulated in Article 17 paragraph (1) of GR 4/19988 the sanction is maximum confinement for maximum of 1 (one) year and/or a maximum fine of Rp. 1.000.000,- (one million Rupiah)

Sofie Widyana P.

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The Function of Proportional Comparison Value for the Owner of Condominium

The Function of Proportional Comparison Value for the Owner of Condominium

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Article 1 Paragraph 7 of Government Regulation of Republic Indonesia on Condominium (“GR 4/1988”) explains the definition of Proportional Comparison Value, is number which shows a comparison between condominium units toward the right upon the common part, common properties, and common lands.

Proportional Comparison Value may be calculated by using 2 (two) ways, which are:

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1. Based on the related amount or value of condominium units towards the total amount of building area.

2. The comprehensive value of condominium at the first time when the developer calculates the total construction costs to determine its selling price

The elucidation in the Article above states that

Proportional Comparison Value from condominium units as referred is calculated when the time developer calculates the total development cost. The price of each unit condominium towards the price of common part, common property, and common lands at the time of calculation of total development cost is used as the basis of Proportional Comparison Value. The Proportional Comparison Value is used as a basis for conducting the separation and the issuance of “Certificate of Condominium Units”, and also as a basis for determining rights and obligations of ownership and management of common part, common property, and common land.

Sofie Widyana P.

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Execution of The Mortgage

Execution of The Mortgage

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Background
Mortgage regulated under the Law No. 4 of 1996 on Mortgage (“Mortgage Law”). Under the Mortgage Law, it is regulated that guarantee repayment of debt through mortgage provides a feature which is called the preferred creditor/ kreditur preferen. Preferred creditor is a creditor who has priority/ privilege right more than other creditor for the debt repayment of debtor in the case of failure events receivable. The holder of mortgage lender who is also separatist creditor has separated position than other creditor in condition of bankruptcy of the personal or legal entity. It is regulated under the Law No. 37 of 2004 on Bankruptcy and Suspension of Payment.

Execution

According to the Great Dictionary of Indonesian Language (Kamus Besar Bahasa Indonesia), execution is “Pelaksanaan putusan hakim; pelaksanaan hukuman badan peradilan atau Penjualan harta orang karena berdasarkan penyitaan.”

Under the Mortgage Law, there are 3 (three) types of the mortgage execution:

1. Executorial Title

Is execution according to irah-irah “Demi Keadilan Berdasarkan Ketuhanan Yang Maha Esa”. The method of that execution is performed by institution of parate executie. It is based on the Code Civil Law. This type of execution has the same strength with court decisions that already have permanent legal force.

2. Execution of The Own Power / Eksekusi atas kekuasaan sendiri

Under The execution of the rule itself has to be settled in previous agreements. According to Article 20 (1) a jo. Article 6 of Mortgage Law, if the debtor defaults then the first mortgage lender has the right to sell the mortgage object on its own power through a public auction and taking the payment of claims from the proceeds.

3. The Underhand Execution/ Eksekusi Dibawah Tangan

The object of the underhand execution is regulated under Article 20 (2) and (3) of the Mortgage Law. The essence of this clause is the existence of an agreement between the giver and the mortgage holders that the sales of the underhand object will obtain the highest price which will benefits all parties. The underhand sales can only be done after 1 (one) month notice in writing by the mortgage holders to the interested parties and it should be published in at least 2 (two) newspapers which circulating in the relevant area and there is no objection from any parties.

Ivan Ari & Ivan Setiady

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Covenants Stipulated in Deed of Granting of Mortgage

Covenants Stipulated in Deed of Granting of Mortgage

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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

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Debt Secured by Mortgage

Debt Secured by Mortgage

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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

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The Legal Meaning of Mortgage

The Legal Meaning of Mortgage

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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.

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Granting and Registration of Mortgage of Land

Granting and Registration of Mortgage of Land

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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.

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