Category Archives: Right of Use

Registration Procedure of Waqf Land

The Minister of Agrarian and Spatial Planning/National Land Agency issued the Minister of Agrarian and Spatial Planning/National Land Agency Regulation No. 2 Year 2017 (“Regulation No. 2/2017”), which stipulates procedures for registering the waqf land. This Regulation No. 2/2017 became effective from 22 February 2017 and revoked (i) Regulation of Minister of Home Affairs No.…
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Indonesia Real Estate Law – The Control of Farmland Possession

Background Determination of maximum and minimum area of farmland previously regulated within Government Regulation in Lieu of Law Number 56 of 1960 regarding the Determination Area of Farmland (“Perpu 56/1960”). Perpu 56/1960 is designated as implementation provision for Article 17 Law Number 5 of 1960 regarding Basic Agrarian Principle. Furthermore, government has also issued Government…
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Authority to Grant the Land Right

Head of National Land Agency Regulation No. 2/2013 on Delegation of Authority to Grant the Land Right and Act of Land Registration (“Head of BPN Regulation 2/2013”) states that the grant of the land right is government decree that grants a right to the state land, including extension to the term of right and the…
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Legal Aspects of the Right to Use and its Regulations

Based on Article 41 of Law Number 5 of 1960 on Basic Regulations on Agrarian Principles (“UUPA”), the definition of Right to Use is the right to use and/or to collect the product, from (i) land which directly controled by the State or (ii) land owned by other persons, which gives the rights and obligations…
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Inheritance of the Right of Use

According to Article 41 of Law Number 5 of 1960 on the Principles Provisions of Agrarian (“Agrarian Law”) [Note: sy sudah ingatkan berkali2 untuk gunakan terms yang sama dengan yang sudah kita buat dan ada di web kita[, Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Agrarian Law, Right of Use can be granted to: Indonesian citizens; foreigners domiciled in Indonesia; Indonesian companies established based on Indonesian law and domiciled in Indonesia; and foreign companies having its representative office in Indonesia. Assignment of Right of Use According to Article 54 paragraph (3) of Government Regulation Number 40 of 1996 on Right to Cultivate, Right to Build, and Right of Use Over Land (“Government Regulation 40”), it is stated that the Right of Use can be assigned by the following reasons: sale and purchase; exchange; capital participation; grant; inheritance. Further, the assignment shall be registered to the Land Office (kantor pertanahan). For the assignment of Right of Use as a result of inheritance, Article 54 paragraph (7) stipulates that the assignment shall be evidenced with the testament or heir information document (surat keterangan waris) which is issued by the competent authority. The Article 42 of Government Regulation Number 24 of 1997 on Land Registration (“Government Regulation 24”) has set out the required documents that must be provided by the heirs for land registration: land certificate; death information document (surat keterangan kematian) of the holder of Right of Use; heir information document (surat keterangan waris). Moreover, the elucidation of Article 42 of Government Regulation 24 stated that the transfer of right is occurred when the holder of Right of Use dies, which means the heir will become the new right holder. With regards to the party who has the right to become the heir, it will depend on the civil law that applies to the existing right holder.

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Legal Aspect on Term of Right of Use Over State Land and Land Under Right of Ownership

According to Article 41 of Law Number 5 of 1960 on the Basic Principles of Land (“Land Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Land Law, Right of Use can be granted to: Indonesian citizens; foreigners domiciled in Indonesia; Indonesian companies established based on Indonesian law and domiciled in Indonesia; and foreign companies having its representative office in Indonesia. Further, as stipulated in Government Regulation Number 40 of 1996 on Right of Cultivation, Right to Build, and Right of Use Over Land (“Government Regulation 40”), Right of Use can be granted over a land with land status of: state land; land under Right of Management (hak pengelolaan); land under Right of Ownership (hak milik). Property ownership by foreigners is specifically stipulated in Government Regulation Number 41 of 1996 on Property Ownership by Foreigner Domiciled in Indonesia (“Government Regulation 41”). Article 2 of Government Regulation 41 states the type of houses which are allowed to be owned by foreigners: houses built over state land; houses built based on an agreement with the holder of Right of Ownership. The agreement shall be made before Land Conveyancing Officer (Pejabat Pembuat Akta Tanah); condominium built under Right of Use over state land . The Term of Right of Use It is stipulated in Article 45 of Government Regulation 40 that the term of the Right of Use over state land is 25 (twenty five) years which can be extended for another 20 (twenty) years. The Government Regulation 40 has set out some requirements before the term of Right of Use can be extended: The land is used according to the land use; Conditions of grant of right have been properly fulfilled by right holder; The right holder fulfills the requirements as the right holder as set out in the Government Regulation 40. Further, for the extension of Right of Use, Article 47 of Government Regulation 40 states that the extension application must be submitted at the latest 2 (two) years before its expiration date. Moreover, the Government Regulation 41 has set out different term for Right of Use for the houses that built based on an agreement with the holder of Right of Ownership, the term of agreement must not exceed 25 (twenty five) years which the agreement can be extended with another 25 (twenty five) years. However, the extension for another 25 (twenty five) years shall be made in a separate agreement between the foreigner and the holder of Right of Ownership. Further, the extension can be made provided that the foreigner is domiciled in Indonesia or for the case of foreign company, having its representative in Indonesia. If the foreigner who owns the house that is built with Right of Use over state land or based on an agreement with right holder is not domiciled anymore in Indonesia, within 1 (one) year, the foreigner has to assign his right to other parties which fulfill the requirements to own the land. In the event the foreigner refuses to assign his right to other parties, the house which is built over state land will be controlled by state to be auctioned. As for the house built based on an agreement with the right holder, the house will be owned by the right holder. Jerry Shalmont

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