Background

Law Number 1 of 2011 on Housing and Settlement (“Housing and Settlement Law”) has already regulated the proportional occupancy. Under Article 34, every legal entity who intends to conduct development of housing and settlement has to implement proportional occupancy. Therefore, in order to regulate in detail the proportional occupancy, Minister Regulation of Housing and Settlement Number 10 of 2012 on Implementation of Housing and Settlement Area Through Proportional Occupancy (“Proportional Occupancy Regulation”) was issued.

Definition of Proportional Occupancy

Under Article 1 of Proportional Occupancy Regulation, the definition of Proportional Occupancy is an equal development of housing and settlement area with certain of composition in the form of single house and series house either modest house, middle house and luxury house or public condominium and commercial condominium.

Purpose of Proportional Occupancy

According to Article 3 of Proportional Occupancy Regulation, the purposes of Proportional Occupancy are:
To ensure the availability of luxury house, middle house and modest house for civilians which are constructed in one area or not in one area for modest house;
To ensure harmony among various categories of civilians from different professions, level of economy and social status of housing, settlement, occupancy area and settlement area;
To ensure crossed subsidy for procurement of infrastructure, facility, and public utility and funding of housing development;
Create a harmony of occupancy whether socially and economically; and
Utilize the use of land which is allocated for housing and settlement area.

Location of Proportional Occupancy

Every person who develops housing and settlement area are obligated to conduct Proportional Occupancy, unless developer intends to develop modest housing and/or public condominium. The implementation of housing and settlement development with Proportional Occupancy must comply with the location of Proportional Occupancy requirements. The implementation of housing and settlement area with Proportional Occupancy is conducted in a housing, settlement, occupancy area and settlement area.

The scale of housing, settlement, occupancy area and settlement area are:

Housing with at least 50 (fifty) houses to 1,000 (one thousand) houses;
Settlement with at least 1,000 (one thousand) houses to 3,000 (three thousand) houses;
Occupancy area with at least 3,000 (three thousand) houses to 10,000 (ten thousand) houses;
Settlement area with at least 10,000 (ten thousand) houses.
The requirements of location for Proportional Occupancy may be conducted in:

One regency/city in one area; or
Not in one area.

The location of Proportional Occupancy in one area at least accommodates 1,000 (one thousand) houses and location of Proportional Occupancy in separate area can be conducted in a housing which accommodate at least 50 (fifty) houses.

Composition of Proportional Occupancy

Furthermore, the compositions of Proportional Occupancy requirements are based on:

The number of houses; and
Area of the land.

The composition based on number of houses means the comparison of modest house, middle house and luxury house. The comparison is in the scale of 3:2:1, which is 3 (three) or more modest house against 2 (two) middle houses against 1 (one) luxury house.

This Proportional Occupancy Regulation defines commercial house as a housing which developed in order to obtain benefit. Luxury house defines as a commercial house with selling price four times higher than the selling price of modest house. Whereas, a modest house is defined as a public house which is built over land with area between 60 m2 and 200m2 with total floor area of building at least 36 m2 with selling price as regulated by the government. In addition to that, a middle house means a commercial house with selling price one to four times higher than the selling price of a modest house.

Composition based on land area means the comparison of area for modest house against total land area. The area of land for a modest house is at least 25% (twenty five percent) from the total land area with amount of modest houses at least equal to amount of luxury houses plus amount of middle houses.

Proportional Occupancy of Condominium

Proportional Occupancy of Condominium is a housing or occupancy area which is developed proportionally between commercial condominium and public condominium. The Proportional Occupancy is at least 20% (twenty percent) from the total floor area of commercial condominium. The public condominium may be developed in a separate building from the commercial condominium, or built within the area of commercial condominium.

Planning, Development and Controlling

A plan to develop housing and occupancy may be conducted in one or separate area or not in one area. Planning which is not in one area shall be conducted by the same person and such plans have to be in a form of the following documents:

Site plan;
design of a house;
Technical specification of a house;
Work plan of proportional occupancy;
Cooperation plan.
These documents must obtain legalization from local government, exclusively for Jakarta region it must obtain the legalization from the local government of Province of Jakarta.

Furthermore, the development of Proportional Occupancy has to be in accordance with the plan. The development of housing, occupancy area and settlement area with Proportional Occupancy solely conducted by a legal entity who works on housing and settlement area. The legal entity may be independent or in a form of cooperation as follows:

Consortium
joint operation; or
Other form of cooperation under the law.
The controlling of proportional occupancy is conducted through:

Warning letter;
Sealed location and temporary termination of development activity;
Cancellation of building construction permit;
Demolishing of building and/or
Sanctions.

The sanctions given to developer may be in a form of administrative sanctions or criminal sanctions which will be regulated further through Local Regulation, exclusively DKI Jakarta will be regulated through Provincial Regulation. In addition to that, pursuant to Article 150 of Housing and Occupancy Law, the administrative sanctions in relation to proportional occupancy may be as follows:

Written warning;
Limitation of development activity;
Temporary or permanent termination of development activity;
Temporary or permanent termination of housing management;
Temporary control by the government (locked);
Obligation to demolish the building in certain period of time;
Limitation of the business activity;
Freezing of building construction permit;
Revocation of building construction permit.
Revocation of the evidence of ownership of house;
Order to demolish the house;
Freezing of business license;
Revocation of business license;
Monitoring;
Cancellation of license;
Obligation to restore the land function in certain period of time;
Revocation of incentive;
Administrative fine and/or
Closure of location

Jeany Tabita