Head of National Land Agency Regulation No. 2/2013 on Delegation of Authority to Grant the Land Right and Act of Land Registration (“Head of BPN Regulation 2/2013”) states that the grant of the land right is government decree that grants a right to the state land,...
Under Article 21 of Government Regulation No. 40 of 1996 on Right to Cultivate, Right to Build and Right to Use Over Land (“GR 40/1996“), land which may be granted by Right to Build (“HGB”) is: state land; right to manage land; right of ownership land. Then based on...
Background
The Province of DKI Jakarta is the one of the biggest city in Indonesia. As the capital city of Indonesia, DKI Jakarta provides various kinds of service to the public. One of its services is related with building development licenses. As an effort of doing servicing, structuring, supervising, and publishing of physical activity and administrative matter of the implementation of building in DKI Jakarta, the Local Government (Pemerintah Daerah) has set out the regulation of building in DKI Jakarta, with the issuance of Local Regulation Number 7 of 1991 (“LR No. 7/1991”).
Along with the times, the Indonesia Government has set out regulation on Building, namely Law Number 28 of 2002 on Building (“Law No. 28/2002”). The enforcement of Law No. 28/2002 causes amendment of LR No. 7/1991. LR No. 7/1991 is amended by the Local Regulation of DKI Jakarta Number 7 of 2010 on Building (“LR No. 7/2010”) which is valid since 5 November 2010.
Classifications of Building
Building function is classified based on:
a. Complexity level, which includes simple building, not simple building, and special building.
b. Permanence level, which includes permanent building, semi permanent building, and emergency or temporary building.
c. fire risk level, which includes building with a high level, medium level, and low level of fire risk.
d. earthquake zoning level which is set forth by the authorized agency.
e. location, which includes buildings in solid location, medium location, and tenuous location.
f. height, which includes high level building, medium level building, and low level building.
g. ownership, which includes state-owned building, business entity building, and individual building.
Right of Land Status
Any person who would construct the building must have a clear status of ownership land. For the building that is constructed on land owned by other parties, they shall obtain Land Utilization Permit (Izin Pemanfaatan Tanah) from the holder of right of land, in the form of a written agreement, containing at least the following:
a. rights and obligations of the parties;
b. area, location and boundary of land;
c. the function of building; and
d. the period of land utilization.
Building Ownership Status
Any person who owns some part of the building or whole building, shall have the evidence of building ownership which is issued by Local Government, except for the special function building by the Government. In order to issue the evidence of building ownership, each building shall have Building Construction License (“IMB”) and Certificate of Feasible Function (”SLF”).
In one building, it may be given more than 1 (one) evidence of building ownership. The evidence of building ownership may be owned by different owners and it is able to be transferred to other parties. In the matter of the building owner is not the land owner, the transfer of right shall obtain the approval from the land owner.
Requirement for the Issuance of IMB
Any person who would construct the building shall have IMB. IMB may be issued either in permanent or in temporary period of time and it may be given gradually. In order to obtain the IMB, each person shall submit the written application to the Head Office (Kepala Dinas) by attaching the minimum requirements as follows:
a. the evidence of land ownership status or the evidence of agreement;
b. Land Utilization License from the land owner;
c. identity/data of building owner;
d. technical plan of building, and
e. the result of environmental impact analysis for the building that makes a significant impact to the environment.
IMB is issued with the maximum period of time at least 30 (thirty) days since the approval of technical plan document is granted. The application of IMB that has qualified the administrative and technical requirements is approved and legalized by the Local Government. The Chief of Local Government may suspend the IMB establishment process or refuse the IMB application which does not meet the requirements.
Requirement for the Issuance of SLF
SLF is granted for building which has been completed, meeting the requirements of reliability of building and feasibility function, and the function of its utilization is in accordance with the IMB. SLF may be granted gradually in accordance with work level that has completed based on the written application. The examination of feasibility function of building based on the granted IMB, includes:
a. the compatibility of function;
b. layout of building;
c. safety;
d. health;
e. comfort, and
f. ease.
Requirement for the Issuance of Evidence of Building Ownership (Bukti Kepemilikan Bangunan Gedung)
In the matter to obtain an evidence of building ownership, each person shall submit the written application to the Chief of Local Government by attaching the administrative requirement, containing at least the following:
a. agreement and/or approval from both parties in the form of a written agreement;
b. IMB;
c. the suitability of actual data (the latest) with data in the document of right of land status, and
d. the suitability of actual data (the latest) with data in the IMB, and/or document of building ownership status that has existed/owned.
For building that has more than 1 (one) evidence of building ownership, the owner shall attach a written agreement containing at least:
a. rights and obligations of the parties;
b. area, location and boundary of land;
c. the function of building; and
d. the period of land utilization.
The evidence of building ownership is issued with the maximum period at least 30 (thirty) days since the application meet the requirement. The validity period of evidence of building ownership is based on the validity period of deed of land and/or written agreement. The application of evidence of building ownership may be deferred or rejected if it does not meet the requirements.
Requirement for the Environmental Impact Assessment
Every building plan which may cause the important environmental impact assessment shall have an environmental impact analysis. The building plan which does not cause the environmental impact shall have document of environmental management effort and environmental monitoring effort or statement of environmental management.
Administrative Sanction
Every building owner, building user, service provider of building construction, building manager who does not fulfill the obligation of function, and/or the requirement, and/or the providence of building, will be imposed administrative sanction that may include:
a. written warning;
b. restriction of construction activity;
c. temporary or permanent termination on the implementation of development;
d. temporary or permanent termination on the building utilization;
e. freezing of IMB;
f. revocation of IMB;
g. freezing of SLF;
h. revocation of SLF;
i. IPTB (Izin Pelaku Teknis Bangunan) freezing;
j. decreasing of IPTB’s level
k. revocation of IPTB;
l. revocation of the approval of discharging technical plan;
m. freezing of the approval of discharging technical plan;
n. fines; or
o. clearance of building order.
The types of sanction are determined by major and minor violations that have been performed.
Criminal Provisions
Every building technical party who violates the obligations, responsibilities, and prohibitions, shall be punished with a maximum criminal confinement of 3 (three) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).
Any building owner who does not have IMB and SLF as a requirement of the issuance of evidence of building ownership, who is constructing without having the IMB, who does not have SLF when they want to utilize the building, and who does not have the evidence of building ownership, shall be punished with a maximum confinement of 6 (six) months or a maximum fine of Rp 50,000,000 (fifty million Rupiah).
Transitional Provisions
After the LR No. 7/2010 comes into force, then:
a. The license application which is submitted and approved prior to the date of enactment of LR No. 7/2010 and it is still in the settlement process, is processed under the LR No. 7/1991;
b. IMB that has been issued under the LR No. 7/1991 but the related permit has not been issued yet, then the applicable regulation is LR No. 7/1991;
c. the building that has been established, but it has not obtained IMB yet when the LR No. 7/2010 is valid, to apply the IMB it shall obtain the SLF ; and
d. as long as the implementing regulation of LR No. 7/2010 has not been issued yet, then the existing implementation regulation is still valid as long as it is not in contrary to the LR No. 7/2010.
Alsha Alexandra Kartika
Under Article 35 paragraph (1) of Law Number 5 of 1960 on the Principle Provisions of Agrarian (“Agrarian Law”), it is stated as follows:
“Right to Build is right to establish and to have buildings over land that is not his own, with a maximum period of 30 years.”
Right to build (“HGB”) may be extended with a maximum period of 20 years as a request from right’s holder and bearing in mind the need and state of buildings. Subject who can be the holder of HGB is an Indonesian citizen or legal entity that is established under Indonesian law and domiciled in Indonesia. Legal entity is an institution that is given a status as legal entity, such as the Limited Liability Company, Cooperative, the Association of Unit Owners and Occupants of the Condominium, and the Foundation.
According to the Government Regulation of Republic of Indonesia Number 40 of 1996 on Right to Cultivate, Right to Build, and Right of Use Over Land (“GR No. 40/1996”), the granting of HGB over a right of ownership is performed by the holder of right of ownership through a deed made by Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/ PPAT”). The granting of HGB over a Right of Ownership is made by an agreement between the holder of Right of Ownership and the prospective holder of HGB which is stated in the deed that is made by PPAT. The granting of HGB over a right of ownership shall be registered at the Land Office (Kantor Pertanahan). The period of HGB that is issued over the right of ownership is maximum 30 (thirty) years and may be renewed with the new provision of HGB based on the agreement that is implemented on the deed which is made by PPAT and the respective right to build shall be registered in the local land office (kantor pertanahan setempat).
Under Article 41 of Agrarian Law, it is stated as follows:
“Right of Use is the right to use and/or collect the results of the land that is directly controlled by the State or land owned by others, who gives the authority and duties which is specified in the decision by the competent official or in an agreement with the owner of the land, which is not a lease agreement or the agreement to cultivate a land, all things that are not contrary to the spirit and provisions of this law.”
The granting of Right of Use over Right of Ownership is performed by the holder of Right of Ownership through a deed made by Land Conveyancing Officer (“Pejabat Pembuat Akta Tanah/ PPAT”). The granting of right of use over the right of ownership shall be registered on the land book in the Land Office. The right of use over the right of ownership also binds the third party since it is registered. The period of the right of use over the right of ownership is maximum 25 (twenty five) years and it can not be extended. Right of use over the right of ownership may be renewed with the new provision of right of use based on an agreement between the holder of right of use and the holder of right of ownership, as implemented on the deed which is made by PPAT and shall be registered on the local land office.
Alsha Alexandra Kartika
Background
Nowadays, there are various kind of companies established in Indonesia. In term of construction, these companies require a building located on a land. Therefore, according to Law Number 5 of 1960 on the Principle Provisions of Agrarian, there are several rights over land. One of these rights over land is the right to build which can be defined as the right to establish and own a building on a land. The Government Regulation Number 40 of 1996 develops and improves this right to build. The right to build can be given or imposed on state land, land submitted to the right of management, and land submitted to the right of ownership. The right to build can also be used as collateral for loans pledged with mortgage rights.
Allocation of Right to Build
According to the Article 19 of the Government Regulation Number 40 of 1996 describes that right to build is given to Indonesian citizen and legal entities established under Indonesian law and domiciled in Indonesia. The right to build isn’t given to foreigners and foreign entities, so according to article 39 of the Government Regulation Number 40 of 1996 for foreigners and foreign entities, they only have the right to use. The right to build can be granted for a period of 30 years and can be extended for another 20 years. The right to build is given by a decision of the Minister or by an officer appointed upon the recommendation of the management right holders, and have been registered in the book of land in the land office.
Obligations of Holders of Right to Build
The holder of the right to build has to:
to pay money of which amount and terms of payment are specified in the decision , use the land in accordance with its allocation and requirements as stipulated in the decisions and its agreements;
preserve both land and existing building and preserving the environment;
surrender the land back to the State, the holder of Right to Manage or holder of Right of Ownership after the Right to Build is expired;
deliver the certificate of Right to Build which has expired to the Head of the Land Office.
Assignment of the Right to Build
In article 34 Government Regulation Number 40 of 1996, it is mentioned that the Right to Build can be transferred to another party, through a sale and purchase, exchange, capital investment, grants, and inheritance.
Expiration of the Right to Build.
The Right to Build expires if its term ends, is terminated before the term has expired if any requirement is not fulfilled, released voluntarily by the holders of their rights before the the term has expired, is revoked for public purposes, if the land is abandoned or destroyed.
Isrilitha Pratami Puteri
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”).
Background In December 1960, Indonesian Government declared the Law Number 5 of 1960 on the Principle Provisions of Agrarian (the “Agrarian Law”) as the principles legal provisions of land in Indonesia. The Agrarian Law is the principle and basic provisions of the...