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Another horror story with builders in Bali
I have a friend who has a small house here and who is in a right mess. She built the house around two years ago, and she used a local guy who was recommended to her. It is on land she took a 25 year lease on.
She has no contracts or receipts, nothing that relates to her hiring the guy to handle the project. She paid significant amounts of money as the house was being built up to about RP500 million. The original estimate for the whole project was around that amount. Towards the end of the project she was presented with an invoice for ‘extras’ of another, further, RP200 million. She originally agreed to pay feeling pressured, but has since had many reasons to doubt the validity of this claim. She has tried to negotiate a lower amount through lawyers, but the guy will not budge. She used one lawyer who just ripped her off totally, and now a second who seems not capable of doing much accept pass on what the other party is saying. She is currently in America, unable to travel due to illness, and very short of money. The guy is now saying that if she does not pay up by the end of this month, he will go to court. Before things went sour, he even rented the house for her for one year, and pocketed all of that money.
The guy has not offered any proof of the outstanding amount, and has refused point-blank to present any receipts or accounts to her lawyer, saying that he will produce them in court. She wants to sell the house to pay this debt, but cannot as the guy did-not apply for the IMB, which my friend thought he was handling. He did at one point say he had arranged an IMB but was holding it back till he got paid, but just days ago he changed that and said there was no IMB and that he had never applied for it. I asked someone to check, and there is no IMB. Unfortunately this has completely frustrated her attempts to sell the house, clear the debt for a reasonable amount and move on.
Her lawyer is saying that she should settle for the amount being asked, despite saying when hired that proof of a debt must be substantiated by the claimant. Because of her financial situation, her lawyer did agree to be paid the bulk of the fees upon the sale of the house. I am beginning to think that the lawyer simply does not want to get any more involved, and that a court case is more than they want to do with their fees dependant on the house sale. The lawyer has even said my friend stands a good chance of losing the house eventually.
I am at a loss to advise her. Personally I think the plan this guy has is to basically get hold of the house. He has lawyers acting for him, but they are friends so he has not got the worry of paying legal fees. Maybe his layers are also looking for a payout from the spoils.
The only solution I can think of is to sell the lease and the house for a nominal amount to someone in her family, so that the house is no-longer an asset, and then let him do his worst. Does anybody have any knowledge about the legality of such a move, or any other advice or information I could pass on to her in America?
Thanks!
I don't know the exact law, but she should still be able to sell the house without an IMB. Most houses in Indonesia don't seem to have an IMB and properties are being bought and sold all of the time. Where is the property located? How much did she pay for the lease?
Perhaps she really needs to get another lawyer. She should try not to feel pressured. Was the quote written down? How did she pay the builder? Did she get any receipts when she paid the lawyer?
It sounds like the lawyer is lazy or just thinks they won't be paid. There was mention on the forum of a legal office that you can go to get free legal advice. I will try to find it or maybe someone else can post the details. Since nothing was written down, the case could go either way, but to me it seems crazy that she would lose the house.
Does she have evidence that the builder rented the house out? Can the person who rented the house out be contacted?
I would first change the locks to block access, contact some agents and put the house on the market.
Give a man a fish and he will eat for a day. Teach a man to fish and he will sit in a boat drinking beer all day.
A fool and their money are easily parted .Originally Posted by blightyboy
This is seems to be a common occurence here
..., and I cant understand why foregners , who would never ever agree to such situations back in their home countries ( and that usually with all types of consumer protections in place) , would agree to such foolish things here ????????????
I would share Spicyayam's cautious optimism. If it gets to a court, and if they believe she paid 500 million or similar, then I think the chances are good for a favourable outcome. Of course, maybe some further money will need to be paid - she may need to indicate via a lawyer, than any debts that are proven will be paid.
But there are a few steps along the way before getting that far. For these, she really needs to be in Bali, and focusing on getting a trustworthy lawyer/adviser. If her health problems are serious, then she may need to sign a power of attorney or similar so that someone can progress the issue on her behalf.
Good luck, but don't just give up. You pay 500 million - you must own something.
"Horror story...?"
Yes and no.
Yes, because she's been ripped-off blind.
No, because it's her fault.
This is a case of pure, unadulterated stupidity.
I don't share any "optimism" (cautious or otherwise), that this person will receive a favourable outcome.
Read 'em and weep...
Done like a dinner. One of the truly silliest stories I've heard in a long time. With all the other horror stories that have been around for years, you would think that before parting with a sum like that, you would at least have something on paper. So there you go - truth is stranger than fiction, and foolishness knows no bounds.
I wish her all the very best in her "court case" - she's going to need that and more!
Unfortunately I share the gloomy outlook posted by Johnny.
The only thing she really seems to have is the leasehold for 25 years. The house on it is purely coincidental to the whole story really and because she has not proof of purchase or anything it won't enter into any legal discussions.
Fact is the land is hers and that's what she can sell.
If she is being asked to pay an extra 200 million then there must be a contract for some service that has been performed for that amount? Or something from her saying "go ahead" and build it for that price - prior to it being built?
If the creditor has a contract from her for improvments then is would depend upon the wording there if she has to pay or not - she can refute the bill for non performance or shoddy workmanship. At least delay payment until she has the IMB and when the house is sold the creditor can then try his luck through the courts.
If she has the plans for the house then maybe she can still apply for the IMB - with the size it would be for that price the IMB will be cheap too.
Once she has the IMB she can sell the land and the house.
Heartfelt sorrow for a fellow human in trouble but not much else can be done - except hope said creditor falls under a truck...
I hope for her sake that she's at least got the paperwork for that.....on land she took a 25 year lease on...
"Idiot wind - it's a wonder that you still know how breathe"
spicyayam - Thank you and all others for your response and advice.
If she sells without an IMB for the house, she will have to sell for a fraction of the build value. I have checked through property agents and they say that to sell without the IMB will be very hard.
She has paid both lawyers through bank transfer, so that is provable, but I know going after the lawyer is not going to be an option she can handle.
I am afraid that another lawyer is out of the question, she is broke. Her property in the US took a hit and she is barely managing to stay afloat there.
The builder was always paid in cash.
I am the person who rented out the house and that is how I got to know of the problem. She was intending to use the guy who built the house as a manager. He had POA to rent it out on her behalf. It was after this that things went sour. The rent was paid to him via a bank transfer, so yes there are receipts.
If you do find out about any legal office to complain to I would appreciate it. – Thanks spicyayam!
Yes of course the whole thing is stupid beyond belief, she now knows that very well. I know that she suffers endlessly thinking about how naive she has been. She is paying a very heavy price.
Ronb – thanks for your optimism.
JohnnyCool – yes she has the lease agreement. I have seen that when documents were passed to a lawyer.
You could sell it without the IMB and in the purchase agreement you could add a clause subject to obtaining a building permit. So the sale would only be finalized if the buyer was able to get an IMB for the property. I know that this can be done. Ok, the current owner is not going to be able to get the full amount possible, but perhaps she can get back what she put into the property.
Give a man a fish and he will eat for a day. Teach a man to fish and he will sit in a boat drinking beer all day.
spicyayam - Thanks again. I will pass on your advice.
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