Background

Law No. 20 years of 2011 concerning Condominium (“Condo Law”) regulates the quality improvement for condominium (“Condo Unit”) that must be conducted by the owner of unit. It was not regulated in the previous condominium law.

Quality Improvement 

The quality improvement must be conducted by the owner’s unit if the condominium (i) cannot properly function or be repaired and/or (ii) it can cause danger in its utilisation to the building and/or the environment. The determination of the quality improvement for condominium in accordance with its conditions above, is the authority of the regional government.

The quality improvement of condominium can also be conducted on the initiative of owner’s unit. The quality improvement is conducted by rebuilding it, through the demolition, arrangement and development stages. That quality improvement is carried out whilst protecting ownership rights, which seeks to include the interests of owners or residents by taking into account equitable, social, cultural and economic factors.

The quality improvement on the initiative of the owner’s unit is conducted by:

  1. The owner’s unit for public own condominium and commercial condominium through the Condominium Owner and Tenant Association (“P3SRS”).
  2. Government, regional government or the owner of rent public own condominium and special condominium; or
  3. Government or regional government for state condominium.

The quality improvement on the owner’s unit initiative must be approved at least 60% (sixty percent) of P3SRS members.

There are several requirements that must be conducted by the inisiator (P3SRS, government or regional government) before the quality improvement is conducted, as follows:

  1. notify all residents with the plan to improve the quality of the condominium at least 1 year before the execution
  2. provide an opportunity for owners to submit feedback on quality improvement plans
  3. prioritise old owners to receive improved condominiums upon their completion.
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In the event of such improvement that the P3SRS can be cooperated with a developer based on a written agreement made before an authorised official based on the principle of equality. The  quality improvement of public or special condominiums are carried out by implementing agencies.

It must be notified that Condo Law regulates that a developer has also the responsibility of its quality improvement with providing a decent temporary shelter, taking into consideration the factors of distances, facilities, infrastructure and public utilities, including funding. While the P3SRS is responsible for the reoccupancy of the old owner after the completion of the quality of the condominium.

Sanctions

Violation of the obligation to improve the quality of condominium and requirements that must be carried out by the initiator prior to quality improvement can be subject to administrative sanctions. In addition, there is also a criminal sanction if someone obstructs its improvement quality, which is a maximum imprisonment of 2 years or a maximum fine of Rp. 200,000,000 (two hundred million Rupiah).

Sharini Arachchige