Summary of Regulations

Summary of Minister Regulation of Housing and Settlement Number 10 of 2012 on Implementation of Housing and Occupancy Area Through Proportional Occupancy

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Background

Law Number 1 of 2011 on Housing and Settlement (“Housing and Settlement Law”) has already regulated the proportional occupancy. Under Article 34, every legal entity who intends to conduct development of housing and settlement has to implement proportional occupancy. Therefore, in order to regulate in detail the proportional occupancy, Minister Regulation of Housing and Settlement Number 10 of 2012 on Implementation of Housing and Settlement Area Through Proportional Occupancy (“Proportional Occupancy Regulation”) was issued.

Definition of Proportional Occupancy

Under Article 1 of Proportional Occupancy Regulation, the definition of Proportional Occupancy is an equal development of housing and settlement area with certain of composition in the form of single house and series house either modest house, middle house and luxury house or public condominium and commercial condominium.

Purpose of Proportional Occupancy

According to Article 3 of Proportional Occupancy Regulation, the purposes of Proportional Occupancy are:
To ensure the availability of luxury house, middle house and modest house for civilians which are constructed in one area or not in one area for modest house;
To ensure harmony among various categories of civilians from different professions, level of economy and social status of housing, settlement, occupancy area and settlement area;
To ensure crossed subsidy for procurement of infrastructure, facility, and public utility and funding of housing development;
Create a harmony of occupancy whether socially and economically; and
Utilize the use of land which is allocated for housing and settlement area.

Location of Proportional Occupancy

Every person who develops housing and settlement area are obligated to conduct Proportional Occupancy, unless developer intends to develop modest housing and/or public condominium. The implementation of housing and settlement development with Proportional Occupancy must comply with the location of Proportional Occupancy requirements. The implementation of housing and settlement area with Proportional Occupancy is conducted in a housing, settlement, occupancy area and settlement area.

The scale of housing, settlement, occupancy area and settlement area are:

Housing with at least 50 (fifty) houses to 1,000 (one thousand) houses;
Settlement with at least 1,000 (one thousand) houses to 3,000 (three thousand) houses;
Occupancy area with at least 3,000 (three thousand) houses to 10,000 (ten thousand) houses;
Settlement area with at least 10,000 (ten thousand) houses.
The requirements of location for Proportional Occupancy may be conducted in:

One regency/city in one area; or
Not in one area.

The location of Proportional Occupancy in one area at least accommodates 1,000 (one thousand) houses and location of Proportional Occupancy in separate area can be conducted in a housing which accommodate at least 50 (fifty) houses.

Composition of Proportional Occupancy

Furthermore, the compositions of Proportional Occupancy requirements are based on:

The number of houses; and
Area of the land.

The composition based on number of houses means the comparison of modest house, middle house and luxury house. The comparison is in the scale of 3:2:1, which is 3 (three) or more modest house against 2 (two) middle houses against 1 (one) luxury house.

This Proportional Occupancy Regulation defines commercial house as a housing which developed in order to obtain benefit. Luxury house defines as a commercial house with selling price four times higher than the selling price of modest house. Whereas, a modest house is defined as a public house which is built over land with area between 60 m2 and 200m2 with total floor area of building at least 36 m2 with selling price as regulated by the government. In addition to that, a middle house means a commercial house with selling price one to four times higher than the selling price of a modest house.

Composition based on land area means the comparison of area for modest house against total land area. The area of land for a modest house is at least 25% (twenty five percent) from the total land area with amount of modest houses at least equal to amount of luxury houses plus amount of middle houses.

Proportional Occupancy of Condominium

Proportional Occupancy of Condominium is a housing or occupancy area which is developed proportionally between commercial condominium and public condominium. The Proportional Occupancy is at least 20% (twenty percent) from the total floor area of commercial condominium. The public condominium may be developed in a separate building from the commercial condominium, or built within the area of commercial condominium.

Planning, Development and Controlling

A plan to develop housing and occupancy may be conducted in one or separate area or not in one area. Planning which is not in one area shall be conducted by the same person and such plans have to be in a form of the following documents:

Site plan;
design of a house;
Technical specification of a house;
Work plan of proportional occupancy;
Cooperation plan.
These documents must obtain legalization from local government, exclusively for Jakarta region it must obtain the legalization from the local government of Province of Jakarta.

Furthermore, the development of Proportional Occupancy has to be in accordance with the plan. The development of housing, occupancy area and settlement area with Proportional Occupancy solely conducted by a legal entity who works on housing and settlement area. The legal entity may be independent or in a form of cooperation as follows:

Consortium
joint operation; or
Other form of cooperation under the law.
The controlling of proportional occupancy is conducted through:

Warning letter;
Sealed location and temporary termination of development activity;
Cancellation of building construction permit;
Demolishing of building and/or
Sanctions.

The sanctions given to developer may be in a form of administrative sanctions or criminal sanctions which will be regulated further through Local Regulation, exclusively DKI Jakarta will be regulated through Provincial Regulation. In addition to that, pursuant to Article 150 of Housing and Occupancy Law, the administrative sanctions in relation to proportional occupancy may be as follows:

Written warning;
Limitation of development activity;
Temporary or permanent termination of development activity;
Temporary or permanent termination of housing management;
Temporary control by the government (locked);
Obligation to demolish the building in certain period of time;
Limitation of the business activity;
Freezing of building construction permit;
Revocation of building construction permit.
Revocation of the evidence of ownership of house;
Order to demolish the house;
Freezing of business license;
Revocation of business license;
Monitoring;
Cancellation of license;
Obligation to restore the land function in certain period of time;
Revocation of incentive;
Administrative fine and/or
Closure of location

Jeany Tabita

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Summary of Minister of Public Housing Regulation Number 06/PERMEN/M/2009 on the Delegation Of Authority To Grant Business Licenses On Housing Sector in order to Implement One Door Integrated Service in the Field Of Investment to the Chairman of Capital Investment Coordinating Board (“Regulation No. 6”)

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Background

The purpose of the issuance of Regulation No. 6 is to implement the provisions of Article 7 paragraph (2) and paragraph (3) of Presidential Regulation of the Republic Indonesia Number 27 of 2009 on One Stop Integrated Services.

Contents of Regulation No. 06

Government delegates the authority to grant an operating license in housing investments to the Chairman of Capital Investment Coordinating Board with the right of substitution (Article 1 paragraph (1) of Regulation No. 06). The Chairman of Capital Investment Coordinating Board issues business license for and on behalf of the Minister in charge of public housing matter (Article 2 of Regulation No. 06).

The authority that is delegated to the Chairman of Capital Investment Coordinating Board mentioned in Article 1 paragraph (2) of Regulation No. 06 is as follows:

housing business with foreign investment;
Housing business that is within the authority of the government
Under Article 3 of Regulation No. 06, it is regulated that the tasks of the Chairman of Capital Investment Coordinating Board in order to implement the provisions of Article 1 and Article 2 Regulation No. 06 are the following:

Rely on the List Of Closed Business and Opened Business Field with the requirement for capital investment and licensing issued by the Minister in charge of public housing matter;
In the implementation of the grant of license as set out in Article 1 and Article 2, if necessary, for further technical explanation, may contact Echelon I of Ministry of Public Housing;
Submit copy of business license issued to the Minister in charge of public housing matter;
Submit a report at least once a year to the Minister in charge of public housing.

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Government Regulation Number 44 of 1994 on Occupancy of Home by non Owner.

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Background

The purpose of the issuance of Government Regulation Number 44 of 1994 on Occupancy of Home by Non-Owner (“GR No. 44/1994”) is made to ensure fairness and legal certainty of the owner, renters/lessee or occupant in the use of the house and to implement the provisions of Article 12 and Article 13 of Law Number 4 of 1992 on Housing and Residential (“Housing and Residential Law”). This Housing and Residential Law is revoked and replaced by Law Number 1 of 2011 on Housing and Residential Area (“Housing and Residential Area Law”). On this day, GR No.44/1994 is still valid and it has revoked the Government Regulation Number 17 of 1963 on the Principles of Implementation of Government Regulation in Lieu of Law on Permanent Housing (“GR No. 17/1963”) and Government Regulation Number 49 of 1963 on Relations of Housing Operating Lease (“GR No. 49/1963”) as amended by Government Regulation Number 55 of 1981 (“GR No. 55/1981”) and all their implementing regulations so long they regulate the lease of a house.

Contents of GR No. 44/1994.

House is a building that serves as a residence or dwelling and means of fostering family (Article 1 paragraph (3) No. 44/1994). House can be occupied through lease. Under Article 1 paragraph (3) GR No. 44/1994 it is stated that leasing is a condition where the house is occupied not by the owner based on the lease agreement. Further, leasing is based on a written agreement between the landlord and tenant. It is regulated that a house that is in a dispute shall not be leased (Article 4 paragraph (1) & (3) GR No. 44/1994).

If a house is rented out over the land that is owned by other party, then under Article 4 paragraph (1), the leasing can be performed after obtaining the consent of the owner of the land and the approval must be in writing (Article 5 paragraph (1) & (3) GR No. 44/1994). With regards to the amount of rent fees, Article 17 GR No.44/1994 states that it is based on the agreement between the owner and the tenant.

GR No. 44/1994 also regulates the occupancy of house that is made not through a lease. Under Article 14, Article 15 and Article 16, it is stated that the occupancy of house that is not through a lease must be based on a written agreement between the owner and the tenant.

The GR No. 44/1994 was enacted on the 26 December 1994.

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Illegal Occupancy of Land from the Criminal Perspective

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

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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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Summary of Government Regulation Number 39 of 1973 on Judicial Procedure of Indemnity Determination by the High Court Related to the Revocation of the Right of Land and the Objects Over a Land.

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This government regulation regulates a legal action by the parties who are related to the revocation of the right of land and the objects over a land. The parties are able to appeal to high court according to indemnity decision which is not suitable, within 1...

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Requirements of Residences Ownership By Foreigners According to The Agrarian State Minister Regulation/Head of National Land Agency Number 7 of 1996

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This Agrarian State Minister Regulation explains about the requirements of residences ownership by foreigners, within the frameworks of the implementation of the Government Regulation Number 41 Of 1996 On Residences Ownership by the Foreigners Who Are Domiciled in Indonesia (the “GR No. 41 of 1996”). The Foreigners on GR No. 41 of 1996 are the foreigners who own and maintain the economic interests in Indonesia by implementing an investment to have a residential in Indonesia.

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