According to Article 41 of Law Number 5 of 1960 on the Principles Provisions of Agrarian (“Agrarian Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Agrarian Law, Right of Use can be granted to:

  1. Indonesian citizens;
  2. foreigners domiciled in Indonesia;
  3. Indonesian companies established based on Indonesian law and domiciled in Indonesia; and
  4. foreign companies having its representative office in Indonesia.

Assignment of Right of Use

According to Article 54 paragraph (3) of Government Regulation Number 40 of 1996 on Right to Cultivate, Right to Build, and Right of Use Over Land (“Government Regulation 40”), it is stated that the Right of Use can be assigned by the following reasons:

  1. sale and purchase;
  2. exchange;
  3. capital participation;
  4. grant;
  5. inheritance.

Further, the assignment shall be registered to the Land Office (kantor pertanahan). For the assignment of Right of Use as a result of inheritance, Article 54 paragraph (7) stipulates that the assignment shall be evidenced with the testament or heir information document (surat keterangan waris) which is issued by the competent authority.


The Article 42 of Government Regulation Number 24 of 1997 on Land Registration (“Government Regulation 24”) has set out the required documents that must be provided by the heirs for land registration:

  1. land certificate;
  2. death information document (surat keterangan kematian) of the holder of Right of Use;
  3. heir information document (surat keterangan waris).
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Moreover, the elucidation of Article 42 of Government Regulation 24 stated that the transfer of right is occurred when the holder of Right of Use dies, which means the heir will become the new right holder. With regards to the party who has the right to become the heir, it will depend on the civil law that applies to the existing right holder.


Jerry Shalmont, S.H