Property

The Legal Status of Parking Space Under Condominium Law

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Condominium is a multilevel building which is built in an area that is divided into sections which are structured functionally, whether horizontally or vertically that constitutes as units in which each can be owned and used separate
ly, mainly for housing complemented with common equipment (bagian bersama), common facility (benda bersama) and common land (tanah bersama). Condominium is regulated in the Law Number 20 of 2011 on Condominium (“Law No. 20/2011”).

Land on where the building of Condominium stands is a common land. According to the law, common land is a piece of land used under an undivided common right, which is a Condominium building over it, determined in accordance with the building license.

According to Article 1 point 5 and 6 of Law no. 20/2011 common equipment is part of Condominium that is undividedly owned for common use, in a unified function of a Condominium. The examples of these are foundation, column, wall, floor, block, roof, stair, pipes, electricity system, gas, telecommunication and public area of a Condominium. Then, common facility is defined as a thing that does not form part of a Condominium, but jointly owned undividedly, for common use. The examples of these are park, landscaping, social building, religious building, playground, and parking space which is separated or integrated with the structure of Condominium building. Accordingly, based on the definitions set out above, of parking space is regarded as a common facility .

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Debt Secured by Mortgage

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Background
Referring to Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”), particularly Article 10 paragraph (1), it is stated that the granting of mortgage is preceded by a covenant to provide mortgage as the security for settlement of certain debts, which is set out in and as an integral part of the debt (loan) agreement concerned or other agreement which causees such debt. Mortgage is accessoir, which means that the granting of a mortgage should be a follow-up of the principal agreements i.e. agreement that gives rise a legal relation of such debt in which its settlement is secured. Therefore, it can be said that the existence of a mortgage is always agreed upon and follow (accessoir) the principal agreement.

Settlement of Certain Debt

According to Article 3 paragraph (1) of Law 4/96, the debts, in which its settlement can be secured are as follows: [More…]

debt which is already existed at the time of the granting of the Mortgage;
debt which has not yet been existed but has been agreed.

Furthermore, it is also regulated that the amount of the debt which its settlement is secured with the mortgage can be determined at the time agreed (agreed in the related agreement) or determined at the time of the execution petition is filed, under the debt (loan) agreement or other agreement that give rise to the related debt relation.

Article 3 paragraph (2) of Law 4/96 states that the mortgage can be encumbered upon a debt due to a legal relation or upon one or more debts due to several legal relations. Based on that, Rachmadi Usman, S, H., M.H. interprets that the granting of a mortgage is possible upon:

several creditors who combine in providing loan to a debtor under a legal relation (loan agreement);
several creditors who provide loan to a debtor under several and different legal relations (loan agreement) for each creditors.

Ivan Setiady

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The Legal Meaning of Mortgage

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Background
To maintain the sustainability of the national economic development, it needs large amount of funds. The more increase of development activities, the more of the needs of availability of funds, whereas such funds are mostly obtained through credit financing activities.

Considering the importance of the position of credit financing in the property development, it is reasonable enough for the creditor and the debtor and other related parties to obtain protection through an institution of security rights and who can provide legal certainty for all parties concerned, which can
encourage public participation in national development to realize
a prosperousand fair society. In order to realize that purpose, the government already arranged provisions in relation to such security rights, particularly for security rights of land as set forth in Law Number 4 of 1996 on Mortgage (Hak Tanggungan) along with Properties Related to the Land (“Law 4/96”).

Mortgage (Hak Tanggungan) of Land
In Article 1 of Law 4/96, a mortgage is a security right over right(s) of land, along with or without other properties that constitute a unity with such land, for the settlement of certain debts, which gives the preferred position to certain creditors against other creditors (“Mortgage”). Mortgage cannot be split, unless otherwise agreed in the Deed of Granting of Mortgage.

Rights of land that can be encumbered with Mortgage are right of ownership, right to cultivate, right to build, and right of use over state’s land (“Object”). An Object can be encumbered with more than one Mortgage in order to guarantee the settlement of more than one debt. If an Object is encumbered with more than one Mortgage, the rank (level) of each Mortgage is determined by the date of their registration at the Land Office.

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Granting and Registration of Mortgage of Land

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Background
Mortgage (hak tanggungan) of land is a security right over right(s) of land, along with or without other properties that constitute a unity with such land, for the settlement of certain debts, which gives the preferred position to certain creditors against other creditors (“Mortgage”). In this regard, there are procedures for granting, registration and transfer of Mortgage as stipulated in Law Number 4 of 1996 on Mortgage of Land along with Properties Related to the Land (“Law 4/96”).

Granting of Mortgage
Granting of Mortgage is preceded by a promise or covenant to grant the Mortgage as the security of payment of certain debt, which is set out in and as an integral part of the related loan agreement or other agreements that cause such debt.
The granting of Mortgage is conducted by making the Deed of Granting of Mortgage by the Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/PPAT”) in accordance with the related prevailing laws and regulations. In the event that the object of the Mortgage is the right(s) of land which is derived from the conversion of the previous rights that have been eligible to be registered but the registration has not been done, the granting of Mortgage shall be conducted simultaneously with the application for the registration of such right(s) of land.
According to Article 11 of Law 4/96, a Deed of Granting of Mortgage must include:
name and identity of the holder and grantor of Mortgage;
domicile of the parties. If there are any party that is domiciled outside the territory of Indonesia, to such party, shall also be included a choice of domicile in the territory of Indonesia. In the case that the choice of domicile in the territory of Indonesia is not included, the territory of the Land Convenyancing Office where the Deed of Granting of Mortgage is made, is regarded as the chosen domicile;
the clear determination of the debt(s) which is secured by the Mortgage;
the value of the security;
clear description of the object of the Mortgage.

Registration of Granting of Mortgage
The granting of Mortgage shall be registered at the Land Office. PPAT shall deliver the Deed of Granting of Mortgage and the other warkah to the Land Office within a period not later than 7 (seven) business days after the signing date of such Deed of Granting of Mortgage. Registration of Mortgage is conducted by the local Land Office by making the land book of Mortgage and record it in the land book of such right of land (as the object of the Mortgage) and also copy such record into the certificate of right of land concerned.
As the evidence of the existence of the Mortgage, the Land Office will issue certificate of Mortgage in accordance with the prevailing laws and regulations (“Certificate”). This Certificate has the equal executorial power with the court decision which has permanent legal enforcement. The Certificate shall be delivered to the holder of the Mortgage.

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Acquisition Levy of Right of Land and Building

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Background
As we all know, earth, water, and natural resources contained therein controlled by the State and used as much as possible for the prosperity of the people (society). Land and buildings that build on it, in addition to fulfill the basic need, is also constitutes as profitable investment equipment. In other words, land and building have economic value. Therefore, it is reasonable that for those who obtained the right of land and the buildings to give some of the economic value that obtained, to the State through tax payments, especially Acquisition Levy of Right of Land and Building (“BPHTB”). BPHTB is now regulated in Law Number 21 of 1997 on Acquisition Levy of Right of Land and Building (“Law No.21/1997”), as amended by Law Number 20 of 2000 on Amendment of Law No.21/1997 (“Law No.20/2000”).

BPHTB
According to Law No.20/2000, it is stated that BPHTB taxes are imposed on the acquisition of rights of land and/or building. The subject of BPHTB is the individual or entity who obtained rights of land and/or building. The object of BPHTB is associated with the obtainment of right of land and/or building. The obtainment of right of land and/or building consists of:
a. transfer of right due to: sale and purchase, exchange, grant, grant bequest, inheritance, income in the company or other legal entity, resulted in the separation of rights of passage, the appointment of buyers in the auction, the implementation of judgments that have permanent legal force, mergers, consolidation business, business expansion and gifts.
b. conferral of new right due to the continuation of releasing of right, and other than releasing of right.
The rights of land that are subject to BPHTB are Right of Ownership, Right to Cultivate, Right to Build, Right of Use, Right of Ownership on Strata Title, and Right to Manage.
The taxable objects which are exempted from BPHTB shall be the taxable objects that are obtained by:
a. diplomatic representative, consulate based on reciprocal principle;
b. state for performing governmental duties and or development activity for public interests;
c. international organization or representatives of international organization as stipulated by the Minister Decree provided that they neither run business nor do other activities other than their functions and duties;
d. individual or entity due to right conversion or due to other legal acts without any change of name;
e. individual or entity due to endowments;
f. individual or entity for religious service usage.

Acquisition Value
According to Article 5 of Law No.21/1997, the tax rate of BPHTB is in the amount of 5% (five percent) of Acquisition Value of Taxable Object (“NPOPKP”). NPOPKP is the acquisition value of tax object (“NPOP”) reduced with the Acquisition Value of Non-Taxable Object (“NPOPTKP”).
The base of BPHTB imposement is the NPOP. BPHTB is applied for the transaction that exceeds the NPOPTKP, in which is determined regionally, with the maximum amount of Rp 60.000.000,- (sixty million Rupiah), with the exception of the acquisition of rights due to inheritance, gift, bequest which received by person/individual in the direct lineage one degree up or down with the grantor, including husband or wife, in which that the NPOPTKP is regionally determined with the maximum amount of Rp 300.000.000,- (three hundred million Rupiah).
The amount payable of BPHTB is calculated by multiplying the tax rate of BPHTB with NPOPKP.

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Legal Aspect on Term of Right of Use Over State Land and Land Under Right of Ownership

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According to Article 41 of Law Number 5 of 1960 on the Basic Principles of Land (“Land Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Land Law, Right of Use can be granted to:

Indonesian citizens;
foreigners domiciled in Indonesia;
Indonesian companies established based on Indonesian law and domiciled in Indonesia; and
foreign companies having its representative office in Indonesia.

Further, as stipulated in Government Regulation Number 40 of 1996 on Right of Cultivation, Right to Build, and Right of Use Over Land (“Government Regulation 40”), Right of Use can be granted over a land with land status of:

state land;
land under Right of Management (hak pengelolaan);
land under Right of Ownership (hak milik).

Property ownership by foreigners is specifically stipulated in Government Regulation Number 41 of 1996 on Property Ownership by Foreigner Domiciled in Indonesia (“Government Regulation 41”). Article 2 of Government Regulation 41 states the type of houses which are allowed to be owned by foreigners:

houses built over state land;
houses built based on an agreement with the holder of Right of Ownership. The agreement shall be made before Land Conveyancing Officer (Pejabat Pembuat Akta Tanah);
condominium built under Right of Use over state land .

The Term of Right of Use

It is stipulated in Article 45 of Government Regulation 40 that the term of the Right of Use over state land is 25 (twenty five) years which can be extended for another 20 (twenty) years. The Government Regulation 40 has set out some requirements before the term of Right of Use can be extended:

The land is used according to the land use;
Conditions of grant of right have been properly fulfilled by right holder;
The right holder fulfills the requirements as the right holder as set out in the Government Regulation 40.
Further, for the extension of Right of Use, Article 47 of Government Regulation 40 states that the extension application must be submitted at the latest 2 (two) years before its expiration date.

Moreover, the Government Regulation 41 has set out different term for Right of Use for the houses that built based on an agreement with the holder of Right of Ownership, the term of agreement must not exceed 25 (twenty five) years which the agreement can be extended with another 25 (twenty five) years. However, the extension for another 25 (twenty five) years shall be made in a separate agreement between the foreigner and the holder of Right of Ownership. Further, the extension can be made provided that the foreigner is domiciled in Indonesia or for the case of foreign company, having its representative in Indonesia.

If the foreigner who owns the house that is built with Right of Use over state land or based on an agreement with right holder is not domiciled anymore in Indonesia, within 1 (one) year, the foreigner has to assign his right to other parties which fulfill the requirements to own the land. In the event the foreigner refuses to assign his right to other parties, the house which is built over state land will be controlled by state to be auctioned. As for the house built based on an agreement with the right holder, the house will be owned by the right holder.

Jerry Shalmont

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Condominium on the Land with Right to Build over the Land with Right of Management

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Background

Article 7 paragraph (1) and (2) of Law Number 16 of 1985 on Condominium, the developer (the “Developer”) may build a condominium over the land with Right of Management (Hak Pengelolaan) (“HPL”). HPL is a right to control, given by the state which the implementation is delegated to its holder. Rights of land that may be granted over the HPL land are Right to Build (Hak Guna Bangunan) (“HGB”) and Right of Use (Hak Pakai) (“HP”). The Developer is obligated to complete the HGB or HP status of the land prior to the initial offer of any property over the land, in accordance with the prevailing laws and regulation. Therefore, the Developer must be aware of the procedure of the obtaining of such rights and other requirements related to HGB and HP over HPL land, which is set out in the Government Regulation Number 40 of 1996 (“GR 40/1996”) and State Minister of Agrarian/Chief of National Land Agency Regulation Number 9 of 1999 on Procedure of the Granting of Rights of Land and Revocation of Right of State Land and Right of Management (“Regulation 9/1999”).

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Law on Housing and Habitation

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On 12 January 2011, the Government issued the Law Number 1 of 2011 on Housing and Habitation (“Housing Law”). By the issuance of this law, the existed law on housing Number 4 of 1992 has been revoked. This new Housing Law is divided into 2 (two) parts i.e. housing and habitation. The purpose of this Housing Law is to fulfill the public needs for housing.

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