Conditional Sale and Purchase Agreement (“CSPA”) is basically an agreement to buy the property (e.g. land, house, apartment unit, etc), wherethe seller promises to sell the property to the buyer, and the buyer promises to buy the propertyfrom the seller, subject to the fulfillment of certain requirements. Since the CSPA is a form of agreement, the CSPA is subject to the requirements as stated in Article 1320 Indonesian Civil Code (“Civil Code”).
Under Article 1320 Civil Code, the condition for an agreement to be valid is separated in 2 (two) clauses, there are subjective clause and objective clause. Subjective clause consists of:
- There must be agreement by the parties;
- There must be capacity to close the agreement.
Objective clause consistsof: Read the rest of this entry »
Definition and Legal Basis
Based on Article 28 paragraph (1) Law No. 5 of 1960 on Basic Provisions on Agrarian (“UUPA”), Right to Cultivate is the right to cultivate the land which is controlled by the state, in certain period of time, for farming, fisheries, or animal husbandry (“HGU”). Besides UUPA, other regulations which stipulate about HGU is Government Regulation Number 40 of 1996 on Right to Cultivate, Right to Build, and Right to Use over Land (“GR No. 40/1996”). Further stipulation about HGU is regulated in GR No. 40/1996.
Subject of HGU
Only (i) Indonesian citizen and (ii) legal entity which is established under Indonesian Law and domicile in Indonesia can own HGU. If the holder of HGU is not qualified as Indonesian citizen and as Indonesian legal entity which is domiciled in Indonesia, then in 1 (one) year period the holder of HGU shall release or transfer the HGU to the other party who is qualified. If the HGU is not released or transferred, the HGU shall expire and the status of land will become the state land.