Bali Expat Forum - Bali Travel Forum

I think this thread is getting a little too emotional and digressing from the subject. I am an Investment Banker and imeediately confess not to be a legal expert but, as a professional, before I committed to a holiday home in Bali, I did do a lot of research and would like to contribute what I know.

Firstly,a point of information. There seems to be great misunderstanding about the standing of a Public Notary, especially amongst folks such as myself, who come from countries where there is a system of Common law (Canada, The US, The UK etc.) In these countries, a Notary is a clerical level position with the function of acknowledging and stamping documents. However, in countries based on the Napoleonic system, where Civil law prevails, this very different. In Indonesia, all Notaries must qualify as lawyers (SH) before obtaing a Postgraduate qualification as a Notary (M.Kn.) Even then further study and qualification is required before obtaing PPAT status, which conveys Government recognition for the conveyancing of land.
Therefore, in Indonesia, a Notary is also by definition also a lawyer. A Notary could, in fact, also practise as a lawyer BUT could not then simultaneously practise as a Public Notary.

Notaries spend most of their time working on land matters so it would seem to me that thry should the first point of contact regarding land mattes.

Secondly, land tenure in Indonesia is regulated by NATIONAL law, srting with the basic agrarian law UU5/1960. It is true that Adat is important in Bali, particularly in respect of inheritence of land, but it does NOT govern the basic principles of land ownership in the Indonesian State.

Thirdly, in Indonesia, as elsewhere in the world, other than in the existence of a pre-nuptial agreement entered into before marriage, property within a marriage is regarded as common property. And therein lies the problem.

During the conveyancing of land, one document which SHOULD be required by the Notary is the Kartu Keluarga (KK). This would establish that the spouse is a foreigner and any honest notary would not process any such transaction. The raeson being, implicit in the above, the land would become common property within the marriage; but a foreigner cannot own land.
In circumstances (Inheritence for instance) where a foreigner, against the specific provisions set forthe in indonesian law, becomes the beneficiary of land and/or property, then the foreigner is provided with a period of 12 months to sell the land.

In the example discussed in this thread, I believe there is cause for concern. Should land be illegally controlled by a foreigner, either individually or as a half share within a marriage, the Indonesian Government could, at its own discretion, confiscate the land and return it to state ownership.

The information above was all provided to me locally and double researched in Jakarta by both leading Notaries ans International law firms because I was originally considering using a Nominee Structure for my property and my potential Nominee was a married Indonesian woman.

In Indonesia, so many things can be left to lie. Until there is a problem.

I think pre nup agreement is a good solution for all of this problem. I have prenup since i married my husband on 1993 and this paper its soooo great to save our time and our nerves with property law problem and other case.

And i tell about it with my indonesian family and have testament for my indonesian family, what i would like to do with my ownership in Indonesian. Basta. So my husband and i we have much time for the other good things as to think about this problem

Regards,
Dyah

Interesting points SanurGirl, and thanks for making your post. The confiscation issue was discussed on the basis of the government seizing land from an Indonesian woman married to a foreigner while she was presumably still alive and acquiring the property post marriage. If you or anyone else can come up with a case where that has happened in Bali, that would be of great interest.

As for the notary/attorney issue, the problem still remains that a notary cannot argue a case in court. My positional emphasis on an attorney (who will indeed work with a notary) is that the attorney will almost certainly be more savvy as to what the regency court (where he or she is well known) will, or will not go with in making their decisions if a Hak Milik is challenged. Given the complexity of the laws here, that only heightens my desire to be reliant on an attorney.

As for the inheritance issue, that is no doubt the big problem for foreign males married to Indonesian women, thus our lawyer’s solution of a Hak Pakai (for the foreign male spouse) to become effective upon the death of the Indonesian (female) spouse, with the Hak Milik (deed) being passed to a pre-determined Indonesian (typically in the family). Perhaps in legal terms here, that is like a “pre-nup” actually executed “post-nup”...I don’t know.

I think what is really at issue here is how the law “on the books” may read versus its practical application. In the worst case scenario, I can’t imagine for a minute what an execution would be like if “national forces” tried to take away land from a Balinese women in my village married to a westerner.

To further complicate this discussion is the further issue of the rights of the children of such marriages who now hold dual citizenship. Our attorney is of the legal opinion that the children of such marriages, as dual citizens, have the right to inherit land from their Indonesian mothers regardless of when that property was acquired...pre, or post marriage. Another “sticky wicket” I guess. Do you have any thoughts on that? Presumptive in that, is upon the death of an Indonesian female spouse, but with children (dual citizens) with a foreigner, that dad could remain living their so long as the children didn’t sell the place, or opt to change their citizenship to other than Indonesian. Maybe that means have babies and make sure they love you?

As for the inheritance issue, that is no doubt the big problem for foreign males married to Indonesian women, thus our lawyer’s solution of a Hak Pakai (for the foreign male spouse) to become effective upon the death of the Indonesian (female) spouse, with the Hak Milik (deed) being passed to a pre-determined Indonesian (typically in the family). Perhaps in legal terms here, that is like a “pre-nup” actually executed “post-nup”...I don’t know.

Like I said before, no need. You have a year grace period, in such a case.


p.s. Thanks Sanur girl...

thanks sanurgirl for your very informative posting. nice to get fact over biased opinion once in a while.

ct

Two completely different scenarios are being discussed on this string and at the same time. The first is the issue raised by Alex, that being can an Indonesian woman married to a foreigner legally own land in her own name, and the other is the purchase of land as a foreigner using the nominee structure. That was the issue SanurGirl needed to contend with.

Within the first scenario a sub discussion further developed; that being whether or not using an attorney is either advisable or unnecessary in contracting for land ownership, or land use. My contention always has been, and still is, that for any contracts involving land, it is most advisable for a foreigner, regardless if married or not married to an Indonesian citizen, to use an attorney, specifically one who is located in the same regency as the property to be contracted. Oddly enough, my wife’s sister, a Balinese married to a Balinese, has used an attorney for her own land transactions.

As for the 12 month grace period, our attorney’s view on that is to avoid any possibility of other claims being made against the property by having the Indonesian spouse indicate her intentions of transfer of the property to other specific and named Indonesian ownership while still alive as well as binding that named person to land use rights to the surviving non Indonesian spouse. In that way, the non Indonesian spouse has avoided any challenges to his having exercised any rights reserved solely for Indonesian citizens. In his view it is precisely during this 12 month grace period that the non Indonesian spouse is potentially most vulnerable.

We just went through a reverse case of something similar just this past June for the couple from the US who bought our old house here in Bunutan using my wife Eri as their nominee. In that transaction, they needed a legally binding agreement from me, our sons, and Eri’s family waiving any rights if Eri passed away. Those documents, which are filed at both the land office in Gianyar, as well as in our Banjar office provide a continuum for their continued right to land use, as well as a continuum within Eri’s family for land ownership. Are those contracts all bullet proof? Probably not, but certainly it is better than having no body armor at all.

For those who have a cynical point of view, that being that a foreigner cannot win against an Indonesian in court, then all of this extra attention is moot, and they will certainly have no chance in court, as they haven’t taken the best possible pro-active steps to protect their interests. The point is to avoid court if at all possible.

To make matters worse, there are rumblings of the DPR in Jakarta seriously considering revising all the land laws as they currently apply in Indonesia. The concern is that too much Indonesian land is falling into foreign control, and de-facto ownership. For those of us used to how the DPR works, and recalling the proposed anti-pornography bill of some years past, we have grown used to being scared out of our wits by some of the laws the DPR drafts from time to time. If this were to happen, the big concern would be if currently existing contracts would be grandfathered or not. Never a dull moment, even in a peaceful and tranquil village.

I was actually not responding to the obfuscation and digression but to attempt to respond to the original question posted. To repeat, without a pre-nuptial agreement entered into before marriage, it is not legal for an Indonesian woman married to a foreigner to hold land with Hak Milik title for the reasons discussed earlier.
In this respect, I would counsel posters in contravention of Indonesian agrarian law, especially those with apparent foes on the internet, to be more circumspect about the content of posts.

The arguement about Attorneys versus Notaries was introduced by a poster who seems to have some axe to grind. in analyzing the obfuscation, I would make a couple observations:

1. Had the poster used the services of a competent and honest Notary, the poster would not now be in contavention of Indonesian law because such a Notary would not have agreed to conveyance Hak Milik land title apparently without sight of a Kartu Keluarga showing that one spouce is foreign.

2. Only a Notary is authorized by GOI for land conveyancing. Using an attorney for attendent documentation is fine but should not be necessary if working with a competent notary who is, as I explained at length in my earlier post, also an attorney. In summary, a Notary is also an attorney but an attorney is NOT a notary. To use an attorney because "Only an attorney knows about court interpretations of problems with Hak Milik land" suggests that problems are to expected in advance? Please refer back to the prior sentence!
Actually, most problems occur within the Land Office (BPN) where only a Notary can intervene. I have no axe to grind here myself as I did use both in my my own research. But for rational reasons.

“To repeat, without a pre-nuptial agreement entered into before marriage, it is not legal for an Indonesian woman married to a foreigner to hold land with Hak Milik title for the reasons discussed earlier.”

I “hear” you but that comment leaves out any possibility for an agreement to be made post marriage, without a pre-nup, and that is just not true. What is true, as explained to me, is that any Hak Milik land acquisition made by an Indonesian woman married to a foreigner post marriage must include the essential aspects of a pre-nup, meaning the waiver of all land ownership rights by the foreign husband, (essentially meaning that the man follows the woman), to which the bond of marriage applies. Even if a pre-nup exists, my attorney maintains, (and it sounds reasonable to me), that those essential aspects inherent in a pre-nup be re-stated (contractually) and made a part of the Hak Milik land certificates that follows a marriage.

We may well be saying the same thing, and hung up on semantics, but the idea that an Indonesian woman, who has married a foreigner without a pre-nuptial agreement has waived all her future rights, including land ownership, and without any remedy to address those issues inherent in a pre-nuptial agreement “down the road” (post marriage) is preposterous. There are plenty of mixed Indo/Foreign marriages about where no “pre-nup” (pre-marriage) document was ever executed, but guess what? The Indonesian wife does indeed have legal land ownership because those issues which are often addressed in a pre-nuptial agreement were in fact handled post marriage and as part of the land purchase.

As for the notary only, versus the “hire an attorney” issue, I can only leave that issue, which I have already beaten to death, with a question. That would be, why is it that the vast majority of Australians who enter into ANY land contract in Bali use the very well known, and highly regarded attorney, Peter Johnson? Personally, I’ve never used Peter, as one of the top Indonesian attorneys living in Bali is just a short walk from where we live, and he is a great friend as well as a highly respected member of our community.

If SanurGirl, in offering the mention of a “axe to grind” or suggestions to be more “circumspect” about posts refers to me, may I inform her that I have been living here for just over nine years, and during those years we have, (post marriage and without a pre-nup) acquired five plots of property? The fact is, the first contract I engaged in Bunutan (land “purchase” with nominee), with my attorney was just after Nyepi, ten years ago, and almost a year before Eri and I were married. That Hak Milik included a provision with my land use contract that upon marriage to an Indonesian, the Hak Milik would revert to her...and so it did. I suppose that the ease of that transfer from my nominee, without all the kick, fuss, or rip off that BaliLife would state as certain to be didn’t happen has only confirmed my reliance on our good friend and attorney to present contracts which are as “bullet proof” as I could ever hope for, and he has handled them all.

As for possible land office screw ups, we personally don’t worry about that, as our brother in law heads up that office for the Gianyar Regency. But hell, for all I know, he may have filed all those Hak Milik under his name! That would sure make BaliLife happy, wouldn’t it?

Sorry, but that isn’t going to happen, and it won’t for three good reasons...Bima, Rama and Komang. If you think the Balinese “eat their young” then for certain your geography is way off, not to mention an unaccountable lack of understanding of the Balinese.

Eri and I have been through both ends, as sellers and buyers of real estate in Bali. This isn’t our regular business, but I’m convinced that our suggestions...especially to hire a lawyer, have a great more merit than those who have NEVER been on either side.

I “hear” you but that comment leaves out any possibility for an agreement to be made post marriage, without a pre-nup, and that is just not true. What is true, as explained to me, is that any Hak Milik land acquisition made by an Indonesian woman married to a foreigner post marriage must include the essential aspects of a pre-nup, meaning the waiver of all land ownership rights by the foreign husband, (essentially meaning that the man follows the woman), to which the bond of marriage applies. Even if a pre-nup exists, my attorney maintains, (and it sounds reasonable to me), that those essential aspects inherent in a pre-nup be re-stated (contractually) and made a part of the Hak Milik land certificates that follows a marriage.

Its the first time I heard about a "valid" post marriage agreement, and I would like to know more..... It sounds dodgy, legally wise.

In case of a prenup, records have to be kept regarding ownership, if not, property is assumed to be owned by both anyway.... (Dewi and I have a prenup)

I never heard about this "re-stating" in a Hak Milik certificate, and I have seen a few.... It sounds highly illogical.....

Maybe your lawyer means the actual sales contract.....

As for the notary only, versus the “hire an attorney” issue, I can only leave that issue, which I have already beaten to death, with a question. That would be, why is it that the vast majority of Australians who enter into ANY land contract in Bali use the very well known, and highly regarded attorney, Peter Johnson?

Because he speaks the lingo. And as far as I know, he has no actual legal power, but uses Indo lawyers / notaries to execute things. There are more foreigners working like that....

We may well be saying the same thing, and hung up on semantics, but the idea that an Indonesian woman, who has married a foreigner without a pre-nuptial agreement has waived all her future rights, including land ownership, and without any remedy to address those issues inherent in a pre-nuptial agreement “down the road” (post marriage) is preposterous.

That is one of the reasons why I have made a prenup. So Dewi can inherit. (Not that it ever will happen, because the boys get all. One of the not so nice "Adat" things)

Gee Bert, you are being unusually verbose. I’m far more used to one, or two lines at best responses or input from you. Now I have three posts to respond to! Have mercy Bert!

It’s late, and I’m tired, so maybe tomorrow I’ll be back. In the mean time, you could call a lawyer! Malam

Why? I have a good notary

(and Dewi will be one too!)

Balilife, I have meet some very,very educated villagers that live next to Roy, taught here in the finest U.S schools,,,, One of the head of Roy's village is a young man and I enjoyed speaking with him at gamalong practise,, kinda strange alot of balanise get an expensive western education then move back to the village, but its fact..... Usually the people that have the $800 degrees are westerners trying to teach English abroad.... Or Asians trying to pass off as Doctors in the U.S,,, not lawyers in Bali!!!!!!

Its the first time I heard about a "valid" post marriage agreement, and I would like to know more..... It sounds dodgy, legally wise.

In case of a prenup, records have to be kept regarding ownership, if not, property is assumed to be owned by both anyway.... (Dewi and I have a prenup)

I never heard about this "re-stating" in a Hak Milik certificate, and I have seen a few.... It sounds highly illogical.....

Maybe your lawyer means the actual sales contract.....

I don’t know how much more I can tell you Bert beyond what I’ve already stated. This is all rather still fresh in my mind as we just went through this whole process in reverse with the nominee “sale” of our old house to a couple from California. The husband is a professional real estate agent in California which is about the toughest and most complicated state to buy and sell real estate. He was very satisfied with the contracts that Pak Indra prepared. Yes, I did indeed mean restated in the Hak Milik by way of the actual sales contract.

“Because he speaks the lingo. And as far as I know, he has no actual legal power, but uses Indo lawyers / notaries to execute things. There are more foreigners working like that....”

I believe you are right in that Peter himself cannot argue cases in court, but he can act as an advisor. I know you feel comfortable not using a lawyer because you are a professional in the real estate business. For others, it seems perfectly logical to me when making such a large and significant expenditure to engage a lawyer with a great deal of experience in these matters as they relate to foreigners. SanurGirl is right, notaris spend most of their time only on land related matters, but how many of them are “on the ball” when it comes to such matters involving a mixed marriage couple?

That is one of the reasons why I have made a prenup. So Dewi can inherit. (Not that it ever will happen, because the boys get all. One of the not so nice "Adat" things)

I don’t understand. What do you mean when you say, “because the boys get all...one of the not so nice “Adat” things?” Speaking of Dewi, when will she be finishing up her studies?

Froggy, you are referring to Wayan Dedik who you may or may not know is currently in Chicago with his very pregnant wife working on his doctorate in ethnomusicology. He hopes his “you know whats” thaw out in time for their quick trip back to Bali in July for the 3 month ceremony of their yet to be born (April due date) baby. You might enjoy this photo taken at their wedding:

Its the first time I heard about a "valid" post marriage agreement, and I would like to know more..... It sounds dodgy, legally wise.

This is a classic case of a clever lawyer (Or a lawyer who thinks he is clever?) trying to find a away around the law. As any good lawyer will tell you, a contract is subservient to a higher statute, which includes both PP and UU.
I am even aware of several couples who have actually gone through a divorce to enter into a pre-nuptial agreement then re-married, just to secure the Hak Milik land tenure.
I am also aware of several friends who have received very poor legal counsel in Bali and have subsequently suffered as a result.