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Indonesian property laws
Basic Features of the Indonesian Land Registration System

1. Sale of immovable property is void unless it is registered; a transaction with land is completed by registration .

Sale of immovable property is legally binding if the sale purchase is implemented according to the written regulation, stated in Article 37, paragraph 1 Government Regulation (PP) No. 24/1997 “land registration” The sale purchase should be defined as legal action in the form of a permanent conveyance of land by the seller to the purchaser along with (at the same time) the delivery of the payment to the seller. The legal action transacted by the seller and the purchaser is so called “ tunai ” according to Adat Law and “ tunai ” does not mean cash payment, but merely a two way transaction between the seller and the purchaser. If the “ tunai transaction and subsequent sale purchase” is completed, then registration is simply the task of entering the transaction to the Land Book and the issuance of a certificate. The registration becomes strong evidence of the land conveyancing and is also public information.

2. A person acquiring a right in land cannot assert that right against a third party who has, for value and good faith, acquired and registered the right. However, this provision is considered to be subject to the right to cancel due to improper registration.

Land Registration regulation (PP No. 24/1997) is based on negative publication (i.e. deed of sale) but also contains elements of a positive systems (i.e. title systems). The negative publication systems essentially protect the land certificate holder if the physical and juridical data are correct (the principle “ Nemo Plus Yuris ”).

3. Other than proof of sale, registration determines priority between conflicting interests .

All registered land certificates and also deed of sales (of immovable property), determine priority between conflicting interests, provided the holder obtained the land and physically controls the land. Thus the certificate holder is protected by law.
According to Article 32 verse 2 PP No. 24/1997 on “Land Registration” the certificate holder is protected if he/she obtained the land in good faith and has active possession. After five years from the issuance of the certificate, the holder is secure against other claims. If a third party does not contest the certificate within a 5 year period then the certificate, is deemed uncontestable and absolute.

4. Power to revoke registration of a certificate where the certificate is issued erroneously or illegally.

If the certificate is issued erroneously or illegally it is nullified as the basis for any legal claim to disputed land.

5. Riparian Rights .

Rights that accrue to owners of land such as land adjoining waterways is commonplace in Adat law in Indonesia . Furthermore, the BAL recognises that land adjoined to rivers and waterways enjoins riparian rights. However, the status of riparian rights is deemed to be state land and the owner must apply for the land right to the BPN Provincial Head or the State Minister of Agrarian Affairs.

6. Adverse Possession .

According to the Basic Agrarian Law (BAL) all land in Indonesia is divided into two types -state land ( tanah Negara ) and certificated land ( tanah hak ). If persons occupy state land informally with no registered right this is classified as an illegal occupation of land ( tanah garapan ). However, if these persons can demonstrate adverse possession of state land over a ten year period then he/she can apply for ownership rights to the state (State Minister of Agrarian Affair, BPN Provincial Head or Local Land office).
Because of this, the BAL contains no provision to address such issues in Dutch Law known as “ Veijaring ”, because under Adat law this is referred to as “ rechtsverwerking ”.

7. Ownership Spatial Limits .

Article 4 verse 2 BAL, states that ownership of land is limited to the ground datum surface and does not include air or subterranean rights which remain the domain of the state. However, land owners may utilize air and subterranean space in accordance with their demonstrated need. According to the BAL air and subterranean space belongs to the nation and is controlled by the state and local Government. Article 4 verse 2 BAL is therefore a flexible mechanism which could be used as the legal basis to regulate subway development.

8. Ownership Restrictions.

What is the extend of restrictions currently imposed by law?
This are contain in Articles 7 and 17 BAL and are implemented in several regulations (Land reform regulations).
Agricultural land is restricted to Indonesia Nationals, except for plantation areas using HGU certificates. According to land reform regulations, the following restrictions are in place:

a.1 maximum land area per individual
5 to 15 hectares for wet land ( sawah )
6 to 20 hectares for dry land ( kebun )
a.2 Absentee land ownership is forbidden (i.e. the owner must reside in the district where the agriculture land is located). This requirement is “built in” the ownership requirement for agricultural land:

9. Access Rights.

There are no provisions in the BAL relating to access rights. However, it is common practice in both urban and rural areas to allow land owners access over adjoining land to erect or repair fencing etc, with the consent of neighbours.

10. a. An owner of a landlocked parcel has a statutory right across adjoining land to a public way .

Government Regulation (PP) No. 40/1996 states that owners of landlocked parcels have the right to cross adjoining land to a public way. Landholders with HGU (Article 13), HGB (Article 31) and Hak Pakai (Article 51) have the obligation to surrender right of way to the landlocked parcel.

b. Access may be limited to the parent parcel before subdivision .

Access may be granted to residents and effective parties who are adjacent to real estate project before subdivision. Even after subdivision provision can be made for a public way across the parent parcel.

11. Statutory right to lay water pipes, drainage pipes, electrical cable across adjoining land .

This right is for use by public utilities such as PT. PLN, PT. Telkom and local Government public works.
The above agencies and local Government have the necessary authority in the public interest.

12. Statutory access to collect fuel, wild fruits, vegetables and mushrooms is permitted by local custom .

Local customs are still used. For example, indigenous people who live near forest areas still have access to collect fuel, wild fruits, vegetables and mushrooms.

13. Co-ownership is tenancy in common, not joint tenancy .

Indonesia has a Condominium Buildings Act. ( Undang-Undang Rumah Susun Act No. 16/1985); for apartments and/or office buildings. The Act utilizes tenancy in common or the condominium system.

All land is held in common with individual ownership rights for apartment units or office space.

14. Spouses jointly own marriage assets

A transfer of joint property without the consent of both spouses is invalid and may be opportuned by the court.
Indonesia Marriage Law (Act No 1/1974) specifies two types of marital assets

a) individual asset (before marriage), which is called “ harta bawaan ”
b) common assets (after marriage), which is called “ harta bersama ”

For common assets, real property may be registered in the name of the husband or wife.
However, if real property is sole to a third party, each of the husband or the wife must have written consent from each to the other. Without this joint consent the land deed official (PPAT) should not process or notarise any sale purchase deed.

15. Land may be subject to servitude (easement). Easement may be by prescription .

In Indonesia land may be subject to a servitude (easement), which is not regulated by law but by agreement between the parties. In most cases the terms of conditions contained in the former Dutch colonial law (Civil Code) are utilized.

16. Separation of ownership on the same parcels of land .

The BAL is based on unwritten Adat Law, which contains a principle for “Horizontal Splitting” ( asas pemisahan horizontal ). In effect this means that land and the superstructure (building) may be owned by different parties. This principle is still in force.

However in practice, the land deed official (PPAT) would made a sale purchase deed on the combined land and building. These has become common practice by PPAT's because of the positive system legal elements contained in Article 4, Act No. 4/1996 (Land Security/Mortgage act or Undang-Undang Hak Tanggungan ).


National Development Planning Agency and National Land Agency
Support for Long Term Development of Land Management Policies
Financed under IBRD Loan No. 3792 – IND
Contract No. : 1/PAP/SPK/IV/97 dated 7 April 1997

In association with

PT. Pusat Pengembangan Agribisnis & ARCADIS EuroConsultant


Lead Experts :

Dr. Clarissa Fourie, PhD.
Prof. Dr. Asma Affan Nasution, PhD.

The Indonesian Land Administration Project is a cooperative undertaking by the Government of Indonesia, World Bank and the Australian Agency for International Development (AusAID).

LAP-C reports are submitted to the National Development Planning Agency ( Badan Perencanaan Pembangunan Nasional or BAPPENAS ).
Copyright 2000 - National Development Planning Agency ( BAPPENAS ).

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