Condominium Development Policy

Housing and residence are every human being basic needs. With the increasing number of inhabitants, the land space provided becomes very limited. Because of that, houses are made in a multistory structure or commonly known as condominium (rumah susun). The development of condominium is an alternate problem solution of the needs of housing and residences especially in the cities or urban areas where the inhabitant is always expanding. That is because by developing condominium, the use of land can be suppressed, it provides a more spacious open-air city areas, and it can also be used to rejuvenate a city from the slum areas.

Indonesia has a law that regulate condominium, it is Law No. 16 of 1985 about Condominium (the "Law of Condominium”). The definition of condominium according to Article 1 number (1) on the Law of Condominium is a multistory structure building built in an environment that is divided into parts which functionally structurize horizontally and vertically and consist of units that can be owned individually and can be used separately, particularly for residence, which is completed with shared parts, shared properties, and shared land.

The main regulations of condominium are Law No. 16 of 1985 (enacted on December 31, 1985) and Government Regulation No. 4 of 1988 (enacted on April 26, 1988). There are also other regulations that specifically regulate condominium or strata title.

Direction of policy for condominium in Indonesia can be found within the Law of Condominium, there are three (3) essential substances, which are:

  1. The concept of layout and urban development, by using the land efficiently and optimally and also by creating a densely populated residences;
  2. The concept of law development, by creating a new real property rights which is a individual ownership of a condominium but with incorporated rights over shared properties and shared land. Also, by creating a new law association named Tenant Association or Perhimpunan Penghuni, (which by its Article of Association and Bylaws is allowed to act for external and internal matters in favor of the strata title holders), that is responsible for creating an orderly and peaceful environment within the condominium building;
  3. The concept of economic development and business activities, by giving possibilities for construction credit with mortgage or fiduciary upon the land and building which is still under construction.

According to the policy directive mentioned above, the purposes of the condominium development are,

  1. For fulfilling the needs of proper housing in a healthy environment;
  2. For materializing a compatible, harmonious, and well-balanced residences;
  3. For rejuvenating slum areas;
  4. For optimizing city’s land resources; and
  5. For encouraging a densely populated residence.

Those several purposes above should be the guidelines for the condominium developer. The general elucidation of the Law of Condominium emphasized that the development of condominium is intended primarily for residences, particularly for the low-income community. Nevertheless, the development of condominium should create a complete and functional residence, that is why there should be another multistory buildings for other purposes than residence, particularly for the progression of the low-income society’s life.

Therefore, there are other condominiums that the development of it is not for use as residence, the function, however, is to give opportunities for the community’s life, for example, place of business, stores, offices, shopping district, and many others. This matter is stipulated in Article 24 of the Law of Condominium which stated that clauses in it apply with adjustment according to the interest of the other purpose of condominiums, considering that, in reality, there is a need for condominium not as residence but to support the function of residence in order to support the community’s life.

Ardhityo Rompas

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Condominium Development Policy
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