The Cancelation of Conditional Sale and Purchase Agreement of Apartement According to Minister of Public Housing’s Decision

The stipulation about Apartement is regulated under Law Number 20 of 2011 concerning Condominium (“Condominium Law”). Under Article 1 of Condominium Law, Condominium is a highrise building which is built in an environment divided into parts and being structured functionally, either horizontally or vertically and its units can be owned and used separately, especially for residence including with common facility, common equipments, and common land.

The ownership of apartement unit is proven by the Certificate of Ownership over the Condominium Unit (“SHM Sarusun”) if the condominium is built above the land with right of ownership, right to build or right to use. However, if the apartment is built above the state owned object which is in the form of land or waqf land by lease, it can be proven with Certificate of Buliding Ownership over the Building (“SKBG”).

In order to buy an apartement/ condominium unit, the seller and the buyer may bind themselves by making the Conditional Sale and Purchase Agreement (”CSPA”). CSPA on the apartement is regulated under State Minister for Public Housing Decree Number 11/KPTS/1994 on Guidelines of Conditional Sale and Purchase of Condominium Unit. (“Kepmenpera No.11/1994”).

           

In relation to the cancellation of CSPA of apartement units, the Kepmenpera No.11/1994  does not specifically regulate about the conditions or requirements to cancel the CSPA. But on that regulation it is regulated that the CSPA can be nullified if there is a negligence from the Developers to perfectly handover the apartement unit, including the handover of public facilities and social facilities on the specified date that has been determined previously. Chapter III number 5.3 Point 10 on the Attachment of Kepmenpera No.11/1994 states that:

The Developer is obliged to handover the apartement unit including the public facilites and social facilities perfectly on the specified date, and if the developers can not complete the obligation until the stipulated time, the developer will be given a chance to complete the construction in 120 (one hundred and twenty) calendar days, since the plan of apartement unit handover date. If turns out that the construction is not not completed at all, then the CSPA shall be null and void, and the cancellation does not need to be proven or proposed to the District Court or Arbitration Board, and the developer is obliged to return the money that has been accepted from the buyer plus the penalty and interest for each month in accordance with the current bank interest rates.”

Under the provision above, on can see that the concequences if the CSPA are null and void as mentioned above, the Developer shall be imposed with the penalty and monthly interest based on the current bank interest rates.

The Dispute Settlement

The dispute settlement for the dispute which occured in relation to the pre-sale and purchase transactions of condominium unit is performed through the arbitration in accordance with the regulations of Indonesian National Board of Arbitration (“BANI”), with the cost that will be borne by the parties.

However, based on the Condominium Law, the dispute settlement in relation to condominium is not limited through arbitration only. Under Article 105 of Condominium Law, it is stated that the dispute settlement on condominium, shall firstly be performed through mutual agreement. If the mutual agreement has not been reached, the party who suffers losses may claim through district court or out of  court based on the will of the parties, which is through alternative dispute resolution in form of consultation, negotiation, conciliation, and/or expert assessment in accordance with the prevailing laws and regulations.

Sony El Mars

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The Cancelation of Conditional Sale and Purchase Agreement of Apartement According to Minister of Public Housing’s Decision
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