Background

On the 3rd of August 2017, the Government of Republic of Indonesia has enacted the Ministry of Trade Regulation No. 51/M-DAG/PER/7/2017 on Property Brokerage Company (“Permendag No. 51/2017”). This regulation has been made considering the fact that both Permendag No. 33/2008 on Property Brokerage Company and Permendag No. 107/2016 on the Amandment of Permendag No. 33/2008 are no longer compatible with the development of property brokerage businesses. Moreover, the enactment of Permendag No. 51/2017 was in place in order to support the fair business practices which involves professional business entities, thus growing the property industry.

Property Brokerage Company (“P4”) is a business entity, whether as a legal entity or not, established and domiciled in the territory of the Republic of Indonesia that is operating in the brokerage of sell and purchase, lease, research and assessment, marketing, and consultancy and information dissemination related to properties based on request from consumer and regulated in a written agreement made by the parties.

The property brokerage businesses in the territory of the Republic of Indonesia can only be carried out by a national investment company or in a joint venture with foreign companies forming a franchise.

Agreement

In its business operation, P4 is obliged to make a written agreement with consumer with provisions governing matters which at least consist of :

  • scope of services to be provided based on request;
  • property object;
  • rights and obligations of the parties;
  • agreement period;
  • dispute resolution.

Experts

P4 is obliged to have at least two experts, while its branch office with at least one expert. The experts are required to be equipped with their Property Brokerage Competency Certificate and is only allowed to work in one P4.

Scope of Business

The P4 scope of business consists of :

  • property sale and purchase service;
  • property lease service;
  • property research and assessment service;
  • property marketing service;
  • property consultancy and information dissemination service.

Property sale and purchase services consists of activities which include the selling and/or purchasing properties in accordance with the written agreement and P4 is entitled to a minimum of 2% and a maximum of 5% commission of the transaction value. Property lease services consists of activities which include searching for lessor or leasing properties in accordance with the written agreement and P4 are entitled to a minimum of 5% and a maximum of 8% commission of the transaction value.

P4 Prohibitions

P4 is prohibited to :

  • provide false data or information;
  • make an offer based on an uncertain guarantee or to provide false statement;
  • conducting unfair business practices.
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P4 Business License

Every P4, with an exception to branch offices, is obliged to have a Property Brokerage Business License (SIU-P4) which can only be used for and during the operation of property brokerage business practices in the territory of the Republic of Indonesia. SIU-P4 must be re-registered once every five years.

SIU-P4 issuance and re-registration application must be submitted to the Director of Business Development and Distributor of the Ministry of Trade online by utilizing the Online Single Submission Institution (“OSS”) regulated under Government Regulation No. 24 of 2018 on Online Single Submission (“PP No. 24/2018”) and Ministry of Trade Regulation No. 77 of 2018 on Online Single Submission in Trade Sector (“Permendag No. 77/2018”).

SIU-P4 issuance application shall be made by filling out the Request Letter (“SP SIU-P4”) and by uploading documents which include :

  • copy of notarial deed on the establishment of the P4, whether in a form of firm, limited partnership, cooperation, or limited liability company;
  • sufficient statement letter on the existence of the P4 in case it is in a form of a private company;
  • copy of the decree approving the P4 as a legal entity in case it is in a form of a cooperation and limited liability company;
  • a list containing a minimum of two experts along with :
    • statement letter on the capacity as an property brokerage expert working in a P4;
    • copy of valid Property Brokerage Competency Certificate ;
    • curriculum vitae;
    • copy of ID.
  • copy of ID of the owner, manager, or the person in charge of the P4;
  • copy of tax ID number of the owner, manager, or the person in charge of the P4;
  • two pieces of photos of the owner, manager, or the person in charge of the P4 in a size of 4×6 cm;
  • power of attorney signed by the owner, manager, or the person in charge of the P4, in case it is needed.

SIU-P4 issuance as well as its rejection is published online through OSS. Rejected application allows the applicant to submit a new application. SIU-P4 re-registration application shall be made by filling out SP SIU-P4 and uploading the original SIU-P4. The whole process shall be made through OSS. The owner, manager, and the person in charge of the P4 who has obtained SIU-P4 and planning to open a branch office or in need of a new SIU-P4 in order to expand its business are obliged to submit the new SIU-P4 issuance application via OSS and to upload documents which consist of :

  • copy of SIU-P4 that has been legalized by authorized officials.
  • copy of documents related to the establishment of the P4 branch office;
  • a list containing a minimum of one expert working at the branch office along with :
    • statement letter on the capacity as a property brokerage expert working in a P4;
    • copy of valid Property Brokerage Competency Certificate;
    • curriculum vitae;
    • copy of ID.
  • copy of ID of the owner, manager, or the person in charge of the P4 branch office.
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Amandment on P4 data such as the company name, address, owner, manager, or person in charge of the P4 that has it’s SIU-P4 been issued, shall be reported to the Director of Business Development and Distributor of the Ministry of Trade by utilizing OSS no later than two months after the day of the change being made. The revised SIU-P4 shall be published within three days after the application submission.

Application for the replacement of the lost and damaged SIU-P4 to Director of Business Development and Distributor of the Ministry of Trade shall be made by filling out SP SIU-P4 and uploading documents to OSS which consist of :

  • Letter on the Report of Lost SIU-P4 (“SKTLK”) issued by police;
  • Original version of the latter SIU-P4 in case the SIU-P4 has been damaged.

SIU-P4 replacement shall be published via OSS no later than three business days after the application submission. Every P4 are obliged to show the SIU-P4 number in spot where it would be noticeable around the business area and in every publications.

SIU-P4 and OSS

In accordance with Appendix I of PP No. 24/2018 and Appendix I of Permendag No. 77/2018, SIU-P4 is included as one of the business permits with the issuance of it being conducted through the OSS. In this case, although the business permit itself is to be issued by the Minister or any other officials which have been legally assigned to do so, the implementation of the issuance of the documents shall be up to the utilization of OSS.

Regulation in Force

The enactment of Permendag No. 51/2017 has automatically revoked both Permendag No. 33/2008 on Property Brokerage Company and Permendag No. 107/2016 on the Amandment of Permendag No. 33/2008 from their operation.

Jourdan Phillip Daniel