Category Archives: Building

Real Estate Law – Cultivation of Water Resources

Background On 28 December 2015, the government of Republic of Indonesia (“GOI”) has issued the Government Regulation No. 121 of 2015 on the Cultivation of Water Resources (“PP No. 121/2015”) which was effective on the date when it was promulgated, namely 28 December 2015. PP No. 121/2015 is the implementing regulation of the Article 11…
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Real Estate Indonesia – Preserved Cultural Heritage Buildings

Background Ministry of Public Works and Public Housing issued new regulations, namely Ministry of Public Works and Public Housing Regulation No. 01/PRT/M of 2015 on Cultural Heritage Buildings Preserved (“Permen 01/2015”). This regulation came into force since 24 February 2015. Permen 01/2015 is the implementing regulation of Law No. 11 Year 2010 on Cultural Heritage…
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Legal Sanction that may arise due to the use of Building prior to Obtain Certificate of Feasible Function (“SLF”)

Under Article 1 number 16 of Local Regulation of DKI Jakarta Number 7 of 2010 on Building ("LR No. 7/2010"), Certificate of Feasible Function (“SLF”) is a certificate which is granted by Local Government against the building that has been completed and has met the requirement of feasibility function based on examination’s result of building’s feasibility function as a requirement to be utilized. Under Article 237 paragraph (1) of LR No. 7/2010, any person prior to utilization of building shall have SLF. SLF is granted to building which has been completed, met the requirement of reliability and feasibility function of building, and its use function has to comply with Building Construction License (“IMB”). Legal sanction that may arise if using the building prior to obtain SLF is regulated in Article 283 paragraph (2) of LR No. 7/2010, as follows: "Every building owners, building users, service providers of building construction who violate the provisions on Article 13 paragraph (3), Article 15 paragraph (1), Article 124 paragraph (3), Article 183 paragraph (1), Article 186 paragraph (4), Article 188 paragraph (1), Article 191, Article 192, Article 195, Article 231 paragraph (1), Article 237 paragraph (1), and Article 245 paragraph (1) are punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).” In the criminal provision, there is an article which is related to SLF, namely Article 237 paragraph (1). Therefore, it can be concluded that any building owners, building users, service providers of building construction who do not have SLF when utilizing the building, shall be punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah). Alsha Alexandra Kartika

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Summary of the Local Regulation of DKI Jakarta Number 7 of 2010 on Building

Background The Province of DKI Jakarta is the one of the biggest city in Indonesia. As the capital city of Indonesia, DKI Jakarta provides various kinds of service to the public. One of its services is related with building development licenses. As an effort of doing servicing, structuring, supervising, and publishing of physical activity and administrative matter of the implementation of building in DKI Jakarta, the Local Government (Pemerintah Daerah) has set out the regulation of building in DKI Jakarta, with the issuance of Local Regulation Number 7 of 1991 (“LR No. 7/1991”). Along with the times, the Indonesia Government has set out regulation on Building, namely Law Number 28 of 2002 on Building ("Law No. 28/2002"). The enforcement of Law No. 28/2002 causes amendment of LR No. 7/1991. LR No. 7/1991 is amended by the Local Regulation of DKI Jakarta Number 7 of 2010 on Building ("LR No. 7/2010") which is valid since 5 November 2010. Classifications of Building Building function is classified based on: a. Complexity level, which includes simple building, not simple building, and special building. b. Permanence level, which includes permanent building, semi permanent building, and emergency or temporary building. c. fire risk level, which includes building with a high level, medium level, and low level of fire risk. d. earthquake zoning level which is set forth by the authorized agency. e. location, which includes buildings in solid location, medium location, and tenuous location. f. height, which includes high level building, medium level building, and low level building. g. ownership, which includes state-owned building, business entity building, and individual building. Right of Land Status Any person who would construct the building must have a clear status of ownership land. For the building that is constructed on land owned by other parties, they shall obtain Land Utilization Permit (Izin Pemanfaatan Tanah) from the holder of right of land, in the form of a written agreement, containing at least the following: a. rights and obligations of the parties; b. area, location and boundary of land; c. the function of building; and d. the period of land utilization. Building Ownership Status Any person who owns some part of the building or whole building, shall have the evidence of building ownership which is issued by Local Government, except for the special function building by the Government. In order to issue the evidence of building ownership, each building shall have Building Construction License (“IMB”) and Certificate of Feasible Function (”SLF”). In one building, it may be given more than 1 (one) evidence of building ownership. The evidence of building ownership may be owned by different owners and it is able to be transferred to other parties. In the matter of the building owner is not the land owner, the transfer of right shall obtain the approval from the land owner. Requirement for the Issuance of IMB Any person who would construct the building shall have IMB. IMB may be issued either in permanent or in temporary period of time and it may be given gradually. In order to obtain the IMB, each person shall submit the written application to the Head Office (Kepala Dinas) by attaching the minimum requirements as follows: a. the evidence of land ownership status or the evidence of agreement; b. Land Utilization License from the land owner; c. identity/data of building owner; d. technical plan of building, and e. the result of environmental impact analysis for the building that makes a significant impact to the environment. IMB is issued with the maximum period of time at least 30 (thirty) days since the approval of technical plan document is granted. The application of IMB that has qualified the administrative and technical requirements is approved and legalized by the Local Government. The Chief of Local Government may suspend the IMB establishment process or refuse the IMB application which does not meet the requirements. Requirement for the Issuance of SLF SLF is granted for building which has been completed, meeting the requirements of reliability of building and feasibility function, and the function of its utilization is in accordance with the IMB. SLF may be granted gradually in accordance with work level that has completed based on the written application. The examination of feasibility function of building based on the granted IMB, includes: a. the compatibility of function; b. layout of building; c. safety; d. health; e. comfort, and f. ease. Requirement for the Issuance of Evidence of Building Ownership (Bukti Kepemilikan Bangunan Gedung) In the matter to obtain an evidence of building ownership, each person shall submit the written application to the Chief of Local Government by attaching the administrative requirement, containing at least the following: a. agreement and/or approval from both parties in the form of a written agreement; b. IMB; c. the suitability of actual data (the latest) with data in the document of right of land status, and d. the suitability of actual data (the latest) with data in the IMB, and/or document of building ownership status that has existed/owned. For building that has more than 1 (one) evidence of building ownership, the owner shall attach a written agreement containing at least: a. rights and obligations of the parties; b. area, location and boundary of land; c. the function of building; and d. the period of land utilization. The evidence of building ownership is issued with the maximum period at least 30 (thirty) days since the application meet the requirement. The validity period of evidence of building ownership is based on the validity period of deed of land and/or written agreement. The application of evidence of building ownership may be deferred or rejected if it does not meet the requirements. Requirement for the Environmental Impact Assessment Every building plan which may cause the important environmental impact assessment shall have an environmental impact analysis. The building plan which does not cause the environmental impact shall have document of environmental management effort and environmental monitoring effort or statement of environmental management. Administrative Sanction Every building owner, building user, service provider of building construction, building manager who does not fulfill the obligation of function, and/or the requirement, and/or the providence of building, will be imposed administrative sanction that may include: a. written warning; b. restriction of construction activity; c. temporary or permanent termination on the implementation of development; d. temporary or permanent termination on the building utilization; e. freezing of IMB; f. revocation of IMB; g. freezing of SLF; h. revocation of SLF; i. IPTB (Izin Pelaku Teknis Bangunan) freezing; j. decreasing of IPTB’s level k. revocation of IPTB; l. revocation of the approval of discharging technical plan; m. freezing of the approval of discharging technical plan; n. fines; or o. clearance of building order. The types of sanction are determined by major and minor violations that have been performed. Criminal Provisions Every building technical party who violates the obligations, responsibilities, and prohibitions, shall be punished with a maximum criminal confinement of 3 (three) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah). Any building owner who does not have IMB and SLF as a requirement of the issuance of evidence of building ownership, who is constructing without having the IMB, who does not have SLF when they want to utilize the building, and who does not have the evidence of building ownership, shall be punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah). Transitional Provisions After the LR No. 7/2010 comes into force, then: a. The license application which is submitted and approved prior to the date of enactment of LR No. 7/2010 and it is still in the settlement process, is processed under the LR No. 7/1991; b. IMB that has been issued under the LR No. 7/1991 but the related permit has not been issued yet, then the applicable regulation is LR No. 7/1991; c. the building that has been established, but it has not obtained IMB yet when the LR No. 7/2010 is valid, to apply the IMB it shall obtain the SLF ; and d. as long as the implementing regulation of LR No. 7/2010 has not been issued yet, then the existing implementation regulation is still valid as long as it is not in contrary to the LR No. 7/2010. Alsha Alexandra Kartika

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The Legal Status of Parking Space Under Condominium Law

Condominium is a multilevel building which is built in an area that is divided into sections which are structured functionally, whether horizontally or vertically that constitutes as units in which each can be owned and used separate ly, mainly for housing complemented with common equipment (bagian bersama), common facility (benda bersama) and common land (tanah bersama). Condominium is regulated in the Law Number 20 of 2011 on Condominium (“Law No. 20/2011”). Land on where the building of Condominium stands is a common land. According to the law, common land is a piece of land used under an undivided common right, which is a Condominium building over it, determined in accordance with the building license. According to Article 1 point 5 and 6 of Law no. 20/2011 common equipment is part of Condominium that is undividedly owned for common use, in a unified function of a Condominium. The examples of these are foundation, column, wall, floor, block, roof, stair, pipes, electricity system, gas, telecommunication and public area of a Condominium. Then, common facility is defined as a thing that does not form part of a Condominium, but jointly owned undividedly, for common use. The examples of these are park, landscaping, social building, religious building, playground, and parking space which is separated or integrated with the structure of Condominium building. Accordingly, based on the definitions set out above, of parking space is regarded as a common facility .

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Acquisition Levy of Right of Land and Building

Background As we all know, earth, water, and natural resources contained therein controlled by the State and used as much as possible for the prosperity of the people (society). Land and buildings that build on it, in addition to fulfill the basic need, is also constitutes as profitable investment equipment. In other words, land and building have economic value. Therefore, it is reasonable that for those who obtained the right of land and the buildings to give some of the economic value that obtained, to the State through tax payments, especially Acquisition Levy of Right of Land and Building ("BPHTB"). BPHTB is now regulated in Law Number 21 of 1997 on Acquisition Levy of Right of Land and Building (“Law No.21/1997”), as amended by Law Number 20 of 2000 on Amendment of Law No.21/1997 (“Law No.20/2000”). BPHTB According to Law No.20/2000, it is stated that BPHTB taxes are imposed on the acquisition of rights of land and/or building. The subject of BPHTB is the individual or entity who obtained rights of land and/or building. The object of BPHTB is associated with the obtainment of right of land and/or building. The obtainment of right of land and/or building consists of: a. transfer of right due to: sale and purchase, exchange, grant, grant bequest, inheritance, income in the company or other legal entity, resulted in the separation of rights of passage, the appointment of buyers in the auction, the implementation of judgments that have permanent legal force, mergers, consolidation business, business expansion and gifts. b. conferral of new right due to the continuation of releasing of right, and other than releasing of right. The rights of land that are subject to BPHTB are Right of Ownership, Right to Cultivate, Right to Build, Right of Use, Right of Ownership on Strata Title, and Right to Manage. The taxable objects which are exempted from BPHTB shall be the taxable objects that are obtained by: a. diplomatic representative, consulate based on reciprocal principle; b. state for performing governmental duties and or development activity for public interests; c. international organization or representatives of international organization as stipulated by the Minister Decree provided that they neither run business nor do other activities other than their functions and duties; d. individual or entity due to right conversion or due to other legal acts without any change of name; e. individual or entity due to endowments; f. individual or entity for religious service usage. Acquisition Value According to Article 5 of Law No.21/1997, the tax rate of BPHTB is in the amount of 5% (five percent) of Acquisition Value of Taxable Object (“NPOPKP”). NPOPKP is the acquisition value of tax object (“NPOP”) reduced with the Acquisition Value of Non-Taxable Object (“NPOPTKP”). The base of BPHTB imposement is the NPOP. BPHTB is applied for the transaction that exceeds the NPOPTKP, in which is determined regionally, with the maximum amount of Rp 60.000.000,- (sixty million Rupiah), with the exception of the acquisition of rights due to inheritance, gift, bequest which received by person/individual in the direct lineage one degree up or down with the grantor, including husband or wife, in which that the NPOPTKP is regionally determined with the maximum amount of Rp 300.000.000,- (three hundred million Rupiah). The amount payable of BPHTB is calculated by multiplying the tax rate of BPHTB with NPOPKP.

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