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Condominium Law Post Job Creation Law

By July 5, 2021 No Comments

Law No. 20 of 2011 on Condominium (Condominium Law) is one of the laws affected by Law No. 11 of 2020 on Job Creation (Job Creation Law) as part of the purpose of the Job Creation Law to facilitate investment requirements of the public works and public housing sectors. This article will examine what are the important changes occurred in the Condominium Law post Job Creation Law.

Job Creation Law amends 18 articles and removes 6 articles in the Condominium Law. The author sees there are 5 (five) important changes occurring in the Condominium Law. The rest is not so important changes, such as the inclusion of provisions on norm, standard, procedure, and criteria (NSPK), change on the term of Building Construction Permit as replaced by Building Approval and business license (izin usaha)  as replaced by Business License (perizinan berusaha), and the perfection of the contents of the Condominium Law due to revision and removal of some provisions previously regulated.

First, the regulation on the conversion of the construction obligation of public condominium (conversion fund) by the condominium developer that develops commercial condominium. This is new and it is expected to solve the difficulty of constructing a public condominium, which must be performed within the same district/city. The regulation on this conversion is also available under the Law No. 1 of 2011 on Housing and Residential Areas which was amended by the Job Creation Law. The management of the conversion fund will be implemented by the housing acceleration implementation body (BP3).

Second, the implementing body that has never been born under the Condominium Law before it was revised by the Job Creation Law, amended to the BP3. BP3 is a body that covers both landed housing and condominium. Previously, the implementing body was only intended for condominium. BP3 has been born based on Presidential Regulation No. 9 of 2021 (PR BP3). PR BP3 stipulates that BP3 is domiciled in the state’s capital and is a non-structural institution to support the acceleration of the implementation of housing and residential areas. One of the goals of BP3 is to guarantee that simple house can only be owned only and occupied by low-income community (MBR). The facts can indicate the opposite. Therefore, the role of BP3 is expected to ‘straighten out’ the current condition.

Third, the expansion of administrative sanctions over 3 (three) provisions that were previously criminal provisions. Two criminal provisions, namely Articles 98 and 100, were amended to administrative sanction. One criminal provision, namely Article 113 remains a criminal provision but also included as an administrative sanction and there is an addition of certain qualification in that provision. Article 98 stipulates the prohibition to the developer making a conditional sale and purchase agreement (PPJB) that is not in accordance with what has been marketed or before fulfilling certainty requirement. Previously, the criminal threat of violation of this provision was a maximum of 4 years imprisonment or a maximum fine of Rp 4 billion. In addition, Article 100 stipulates a prohibition on construction of a condominium outside the designated location. Previously, the criminal threat of violation of this provision was a maximum of 2 years imprisonment or a maximum fine of Rp 2 billion. The removal of criminal provision relating to PPJB is certainly a great relief to developers. This provision is also felt to be ‘double’ considering similar rule is already stipulated under the Consumer Protection Law. Article 113 stipulates the prohibition on the change of condominium location and the change over condominium use. But, the revised provision  of the Job Creation Law adds that such violation can only be convicted if that violation causes human casualties or damage to goods. Thus, the measure of criminal sanction becomes stricter with the addition of element.

Fourth, relating to the third point, the criminal provision of Article 110 governing the prohibition of PPJB and Article 112 governing the prohibition of constructing a condominium outside the designated location, is removed by the Job Creation Law.

Fifth, there are several provisions relating to heavier conviction to legal entities that are deleted. If a criminal is committed by a legal entity, in addition to a prison sentence and a fine against its management, a criminal fine can be imposed against a legal entity with a penalty of 3 (three) times the criminal fine against the person. Previously, the provisions of Articles 110, 112, and 113 are included as provisions that may aggravate conviction to the legal entities. Nevertheless, through the revision of the Job Creation Law, the provisions of articles 110 and 112 are removed. Meanwhile, although Article 113 remains alive, there is addition of qualification and that provision is no longer included as heavier conviction to the legal entities.

From those five important changes post the Job Creation Law, not all of them are directly related to the developer, for example the provisions on BP3. IOther changes however may be seen as ‘easing’ the burden of developer compared to what has been previously stipulated in the Condominium Law before its revision. The removal of some criminal provisions and some provisions are moved to administrative sanctions should provide new energy to the developer, without harming the protection of condominium consumer. Unfortunately, the provisions if the condominium is bankrupt, either while still under construction or already occupied, is not regulated at all. In fact, the regulation on that issue is crucial, because in such situation both developers and consumers are harmed, even more the consumers.

Eddy M. Leks