Summary of Minister Regulation of Housing and Settlement Number 10 of 2012 on Implementation of Housing and Occupancy Area Through Proportional Occupancy


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:

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

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;
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

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Obligations of Paying Service Charge by The Owner of Condominium Units

Each member of association of owners and tenants of Condominium units (“PPPSRS”) has rights and obligations in relation to management of Condominium units. This membership is represented by householder and shall become effective since recorded in the list of tenants and/or have been domiciled in Condominium units which held by them in accordance with the applicable provisions.

Article 16 paragraph 2 point b Government Regulation Number 4 of 1988 on Condominium (“GR 4/1988”) regulates that, every tenants of Condominium is obligated to pay service charge. The service charge is derived from PPPSRS which is collected by the association or the management board in accordance with the terms that have been agreed between administrator and management board or under the Article of Association or by By-Laws of tenants.

This service charge is the responsibility of owner, unless the owner has transferred it to the tenant. Article 74 paragraph (2) of Law Number 20 of 2011 on Condominium (“Law 20/2011”) states that, PPPSRS consists of the owner or tenants who obtain the authority from the owner of the Condominium unit. The authority from the owner to tenant is limited to tenancy, for example, in determining the amount of service charge for the management of safety, cleanliness, or social community.

Service charge for each Condominium units is calculated from the total cost of the daily management of Condominium units within the budget set by PPPRS. The costs are covered jointly by the owner of Condominium units based on Proportional Value Comparison of Condominium units.

Any Condominium units’ tenant who violates Article 16 paragraph 2 point b of GR 4/1988who does not fulfill the obligation to pay service charge is categorized as unlawful act. As regulated in Article 17 paragraph (1) of GR 4/19988 the sanction is maximum confinement for maximum of 1 (one) year and/or a maximum fine of Rp. 1.000.000,- (one million Rupiah)

Sofie Widyana P.

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Establishment of the Tenant Association of Condominium


Condominium is a building built in an environment which is divided into parts that are functionally structured horizontally and vertically and consisting of units that can be owned individually and can be used separately, particularly for residence, which is completed with common equipment, common facility, and common land. In the condominium, there are private property managed by the owner himself and the common rights which should be used and managed together because it involves the common interest. Utilization and management of condominium and its environment should be arranged and conducted by the tenant association. There are some regulations on the tenant association, such as Law Number 16 of 1985 on Condominium (“Law 16/85”), Government Regulation Number 4 of 1988 on Condominium (“GR 4/88”), and Decree of State Minister of Public Housing Affairs Number 06/KPTS/BKP4N/1995 on Guidance on Making Deed of Establishment and Article of Association of Tenant Association of Condominium (“Decree”).

Tenant Association

According to Article 1 of Law 16/85, tenant association is an association which consists of tenants as its member. Article 19 of Law 16/85 states that tenants of condominium shall establish a tenant association, having the main task to regulate manage, and also to guarantee order, principle of mutual aid, and harmony based on the Indonesian personality, in order to manage the common equipment, common facility, and common land.
Tenant association, by the Law 16/85, is given the status as a legal entity with the deed of establishment and articles of association, therefore, the tenant association may act in and out on behalf of the owner, and with its authority, the tenant association shall realize the comfortability of the environment of the condominium in order. Establishment of tenant association should be executed with a deed that is legalized by Regent, Mayor Head of Region II, and especially in Jakarta, shall be legalized by the Governor Head of Special Capital City Region of Jakarta

Establishment Meeting

Refer to the Decree, it is stated that in the establishment of tenant association, firstly, the owner and/or tenant of condominium shall convene the meeting of establishment of tenant association (“Meeting”), and the result of such Meeting shall be stated in the minutes of Meeting. In the Meeting, it shall appoint some of the member/participant of the Meeting, and such member/participant shall be given the power of attorney to appear before the Notary to make all of the statements as the result of the Meeting. Furthermore, in the Meeting, without prejudice to the permission of the authorities, shall decide and arrange the article of association of the tenant association in accordance with the Decree.

On the tenant association, its membership was chosen based on the family principle by and for the member of tenant association through the general meeting of tenant association which held especially for that necessity, provided that the board of tenant association at least shall consist of a chairman, a secretary, a treasurer, and a management supervisor.

The person who can be the member of the tenant association is a legal subject who has, or use, or rent, or lease or utilize unit of condominium concerned, having status as a tenant. Establishment of tenant association is very important, because it has a main task and authority to manage and maintain the environment of the condominium, and arrange the regulation on tenancy rules. Membership of tenant association is based on the reality of occupancy, means that the person who can be a member of the tenant association are those who actually inhabit or occupy the unit of the condominium either on the basis of ownership or other legal relation. If the owner has not yet occupied, use or utilize the unit of condominium, thus, the developer becomes a member of the tenant association. If the developer of condominium is has not yet sold the entire of the units of the condominium, the developer shall act as a member of the tenant association.

Isrilitha Pratami Puteri

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


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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Requirements of Residences Ownership By Foreigners According to The Agrarian State Minister Regulation/Head of National Land Agency Number 7 of 1996

This Agrarian State Minister Regulation explains about the requirements of residences ownership by foreigners, within the frameworks of the implementation of the Government Regulation Number 41 Of 1996 On Residences Ownership by the Foreigners Who Are Domiciled in Indonesia (the “GR No. 41 of 1996”). The Foreigners on GR No. 41 of 1996 are the foreigners who own and maintain the economic interests in Indonesia by implementing an investment to have a residential in Indonesia.

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