The Differences of Concept Between Public Condominium and Commercial Condominium Based on Law No. 20 of 2011 on Condominium

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Under Article 1 of Law No. 20 of 2011 on Condominium (“Condominium Law”), a public condominium is defined as a condominium which is built to fulfill the needs of home for people with low income. Whereas, a commercial condominium is defined as a condominium which is built to obtain profits.

Development of Condominium

The development of public condominium is the responsibility of the government, which can be conducted by everyone with the facility and/or assistance from the government and also by non-profit organization and business entity. The development of commercial condominium can be conducted by everyone, provided that the commercial condominium developer shall provide the public condominium at least 20% from the total floor area of the commercial condominium being developed. The obligation to build public condominium as mentioned above the developer can be conducted outside of the area of commercial condominium as long its still in the same regency/city with the related commercial condominium.

Occupancy Over Condominium Unit

Under Article 45 of Condominium Law, the control over condominium unit can be conducted through several ways. For public condominium and commercial condominium, the control over condominium unit can be conducted through ownership or leasing, which can be implemented with a written agreement made before an authorized official. The written agreement has to be registered to Condominium Owner and Tenant Association (“PPPSRS”) as a legal entity. The members of the PPPSRS consists of the owners or the tenants of the condominium.

Utilization of Condominium Unit

In relation to the utilization of condominium unit, the Condominium Law only addresses about the utilization of public condominium. Under Article 54 of Condominium Law, it is stated that public condominium which receives the facility from the government can only be owned or leased by the people of low income. Every person who owns public condominium can only transfer their ownership to another party in the case of:

  • inheritance;
  • after time period of 20 (twenty) years since  the ownership of condominium;
  • move out from the place of residence which can be proven by statement letter issued by the authorities.

Management of Condominium Unit

Based on Article 59 of Condominium Law, the developer which conducts the development of owned public condominium (rumah susun umum milik) and commercial condominium shall manage the condominium during the transition period. The transition period is a period when (i) the condominium unit is not entirely sold, and (ii) before the establishment of PPPSRS. The maximum period of transition period is 1 (one) year since the first handover of the condominium unit to the owner. The developer can also cooperate with the manager of the condominium. The amount of condominium management fee during the transition period is covered by the developer and the owner of the condominium unit based on the Proportional Comparison Value (NPP) of each condominium.

Quality Improvement on Condominium Unit

Quality improvement on condominium unit can be conducted based on the initiative of the owner, including the owner of owned public condominium and commercial condominium through PPPSRS. The owner’s initiative shall be approved by at least by 60% from the total members of PPPSRS. In order to make a quality improvement on condominium, PPPSRS can cooperate with the developer of the condominium.

Prohibitions and Sanctions

Prohibition that is related to public condominium unit is stipulated under Article 103 of Condominium Law, as follows: everyone is prohibited to lease or transfer the ownership of public condominium, except if it is allowed under the Condominium Law. Everyone who violates the above mentioned stipulation shall be penalized with maximum fine of Rp 150.000.000,- (one hundred and fifty million Rupiah). Furthermore, prohibition on commercial condominium is stipulated under Article 97 of Condominium Law, as follows: every developer of commercial condominium is prohibited to breach his/her obligation to provide public condominium at least 20% of total floor area of the commercial condominium that is alreadydeveloped. Every developer who breaches the obligation as mentioned above shall be penalized with maximum of 2 (two) years imprisonment or maximum fine of Rp 20.000.000.000,- (twenty billion Rupiah).

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The Differences of Concept Between Public Condominium and Commercial Condominium Based on Law No. 20 of 2011 on Condominium
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