Article 20 of Act no. 5 year 1960 on Basic Regulations on Agrarian Principles (UUPA) states, “the right of ownership is hereditary right; the strongest and fullest right that a person can have on land with reference to Article 6.” This article is related to Article 6 of UUPA that requires all rights on land to have social function. Concerning the right of ownership, the law states that only Indonesians have the right to own land. The right of ownership is deemed the strongest as it is not easily erased by legal dispute. It is also deemed the fullest as it grants its holder with the fullest authority of the use of the land. It is a hereditary right because its holder can inherit it to his or her inheritors.
Article 35 of UUPA mentions the right to use land, i.e. the right to build or own a building on land owned by another person or legal entity for a period of 30 years. Indonesian citizens and legal entities have a right to build on land that they don’t own. As mentioned in Article 41 Paragraph (1) of UUPA, “the right to build on/use the land is the right to use and/or to harvest from land owned directly by the state or by other entities that grant authority and obligation that are specified—in regard to the granting decision—by the government authority competent of administering the grant or by the agreement made with the land owner, insofar as the agreement is neither a lease nor a cultivation agreement.” It can be concluded that the right of use is inferior in strength and fullness compared to the right of ownership.
The Decree of the State Minister of
Agrarian Affairs/Chairman of the National Land Agency Number 6 Year 1998 on the Granting of the Right of Ownership of Land for Residential Purpose (Perka BPN 6/1998) specify the possibility of changing/upgrading the right of use to the right of ownership provided that the land is used for residential purpose. Article 1 of this regulation specifies the conditions by which upgrade can occur legally and Article 2 explains the process of the right of ownership registration, which includes the submission of the application and certain necessary documents to the local government authority.
Upon the completion of the registration process, Article 2 Paragraph (3) specifies that the Head of the Land Office of the district/municipal government will proceed to abolishing the right of use and registering the right of ownership. The abolition of the right of use will be applied to the land book, land register and other registers. The Head of the Land Office will then register the right of ownership for the land whose right of use has been abolished by preparing the land book while mentioning the decree as the basis for the legality of the right of ownership and issuing the land certificate with measurement letter that is made according to the physical data that are previously used in the registration of the right of building or the right of use.