On 3 October 2022, the Minister of Agrarian Affairs and Spatial Planning issued a decision regarding the granting of land rights in general. This decision was also made to implement the provisions of Article 2 paragraph (4) of the regulation of the minister of agrarian and spatial planning number 18 of 2021 on procedures for determining management rights and land rights (“MD 18/2021”).

The FIRST to SEVENTH dictum in this decision explains that granting of land rights is generally required for:

  • Ownership rights of single houses, shop houses and office houses originating from Right to Build or Right of Use;
    1. For Residential Houses.
      Right to Build or Right of Use over land for residential houses owned by individual Indonesian citizens with an area of up to 600 m2 (six hundred square meters), at the request of the person concerned shall be removed and re-granted to the former right holder with the right of ownership;
      Ownership rights for residential houses can be granted by fulfilling the following conditions;

      • Right to Build or Right of Use is still valid or has expired;
      • On behalf of the right holder who is still alive or dead; and/or
      • Released by the holder of the management right with a letter of approval/recommendation for the granting of Right of Ownership on the part of the land with the Right of Management for the residence located on the Right of Management land for the residence located on the Right of Management land.
    2. For Shop House or Home Offices.
      Right to Build or Right of Use on land with an area of up to 120 m2 (one hundred and twenty square meters) at the request of the person concerned is removed and given back to the former holder of the right with Right of Ownership.
      Right of Ownership for shop houses or home offices can be granted with the following conditions;

      • Land with a building whose establishment permit is as a residence as well as for commercial purposes in the form of shops or offices;
      • Right to Build or Right of Use is still valid or has expired;
      • Name of the living or deceased right holder.
  • Right of Ownership to residential houses purchased by civil servants from the government originating from Rights to Build or Right of Use;
    Right to Build or Right of Use for houses purchased by civil servants from the government, at the request of the person concerned, are removed and re-granted to the former rights holders with Ownership Rights.
    Right of Ownership can be granted with the following conditions;

    1. Right to Build or Right of Use is still valid or has expired.
    2. The name of the right holder is alive or dead.
  • Rights to Build or Right of Use originating from Right of Ownership;
    With this decision, the Right of Ownership belonging to individual Indonesian citizens, at the request of the right holder, are removed and re-granted as the Right to Build or Right to Use with a maximum period of 30 (thirty) years.
  • Rights to Build originating from Right of Use;
    The Right of Use on State Land owned by an individual Indonesian citizen or Indonesian legal entity at the request of the right holder is removed and re-granted as the Right to Build.
    Right to Build in this case can be granted with the following conditions;

    1. The term of the granted Right to Build is the remaining term of the Right of Use.
    2. Obtain a letter of approval or recommendation from the holder of the management right for the Right of Use over the Right of Management.
  • Rights of Use derived from Right to Build;
    Right to Build on State Land or on land with Right of Management belonging to individual Indonesian citizens or Indonesian legal entities, at the request of the right holder is removed and re-granted as the Right of Use.
    The Right of Use in this case can be granted by fulfilling the following provisions;

    1. The term of the Right of Use granted is the remaining term of the Right to Build.
    2. Obtain a letter of approval or recommendation from the holder of Right of Management for the Right to Build over Management Rights.
  • Right to Build or Right to Cultivate derived from Right to Cultivate whose land will be used to construct buildings that support business activities.
    Right to Cultivate whose land will be used to construct buildings that support business activities, at the request of the right holder, are removed and given back to become Right to Build or Right of Use.
    Right to Build or Right of Use in this case can be granted by fulfilling the following conditions;

    1. Changes in Right to Cultivate are due to the fact that the land will be used for business supporting facilities. Right to Build includes emplacements, factory buildings, warehouses, temporary residences for employees or other buildings that support business activities.
    2. Right to Cultivate is still valid.
    3. The area of land to be converted into Right to Build or Right of Use is up to 25 (twenty five) hectares.
    4. The term of the Right to Build or Right of Use granted is the remaining term of the Right to Build and is not more than 30 (thirty) years.
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The decree stipulates, for the land right that is still valid or already expired where its right holder has already died, the respective land certificate will be directly registered under the name of the heirs provided that the tax obligations and inheritance requirements have been fulfilled.

With the enactment of this MD 18/202, several decisions concerning land rights which individually or specifically regulate on land are revoked and declared invalid.

Pitri