Thread: proceeding with rental contract

Originally Posted by mango

Thanks to all of you for the great replies. I suggested 1.5% to him and he was laughing at me, telling me this is not normal in Bali and its unreasonable blalalbla. So I gave up, told him to find someone else. Only now I have to start from scratch again and find another house, ufffff

Good decision

His bluff and bluster is just that. Its not as if he had anything to lose, except you....

Another thing to consider, is that if there's problems in the beginning with unreasonable attitudes, that can continue throughout your rental

You'll find something

Unfortunately its all about legwork, but your house is out there , so get driving in your favourite areas and keep your eyes open for signs

regards
N

Originally Posted by mimpimanis

The deposit I paid was to a family member who was holding the keys and showing the house. The owner wanted the deposit before he would travel over from Java and conclude the deal.

I have never had a notaris contract when renting. Only a contract drawn up by the owner and signed by both of us.

This most recent rental the owner also gave me a copy of the ceritificate and his ktp - to show prove he is the owner.

I believe thats how its done in the normal course. Just a simple contract on plain paper with a 6000 Rp. stamp...signed by both parties along with the identity proof....KTP and KITAS and the house ownership documents. The total rent payable for a 1X12, 2X24 or 3X36 months is paid in advance by cheque or a bank transfer...and once thats done the tenant receives the house keys. I had rented various houses in Jakarta for over 20 years in the same way....But then again...it may be different in Bali

Originally Posted by Vin

I believe thats how its done in the normal course. Just a simple contract on plain paper with a 6000 Rp. stamp...signed by both parties along with the identity proof....KTP and KITAS and the house ownership documents. The total rent payable for a 1X12, 2X24 or 3X36 months is paid in advance by cheque or a bank transfer...and once thats done the tenant receives the house keys. I had rented various houses in Jakarta for over 20 years in the same way....But then again...it may be different in Bali

Hi Vin

What you described is absolutely the norm.

I think the only issue in this case was the owner requesting 30% of two years in advance before a contract/letter of any kind was even drawn up, let alone signed.

What would Mango have received in exchange for that deposit? ... no documents, no keys or access to the house.... bit scary. If anything and gone awry, there was no recourse to be had. Cash gone.

To hand over what could be between 40 and 120 million depending on how much the rent was, without any signed contracts, is pure folly

I mean how long would it take the landlord to have that letter ready anyway? With all this fussing around the letter could have been done and signed, but his statement was that he would not even draw one up, until he'd received 30% of 2 years was to me, the alarm bell. What was his investment in drawing up a letter with a stamp and why does it need 30% deposit, pre paid in order to do so?

He was more interested in getting that cash than he was in getting on with renting the property. It was all a bit smelly and I think Mango has had a close call to be honest.

But handing over the full amount as you say upon signing, when keys and contracts are exchanged with ID's etc, is perfectly reasonable and the way its generally done on shorter term leases like 1 to 3 years

Regards
N

Maybe 30% is the agent commision from the rental and he wants to make sure he gets that in case the deal turns sour ?
Maybe try finding the actual owner by talking to the neighbours ?

Cheers
Ken

I think you may be confusing several things here.

First no house owner in their reasonable mind would do a short term lease thru a notaris - this would create a 10% tax on the lease value.

Second notaris fees are only payable on completion so even if it was through a notaris the 1 1/2% fee to cover the notaris fee is immaterial.

Third even if you pay the 30% after signing contract, property law in Bali is such that he can get you out any time he wants - your only recourse is recovery of your rent - even through a notaris a Hak Sewa lease is not registered at BPN so is not really enforceable.

I think this is a clear case of miscommunication. He is asking as part of the rent agreement for a 30% deposit. This is high but not unreasonable. He is then asking for full amount paid once you move in. Again this is pretty normal in Bali. I think you simply need to negotiate a bit... ask to have a third party such an agent or attorney hold the deposit amount in escrow for you until you get contract or ask for a deposit contract - a one page letter would do. Hoeveras others have said - be careful. We heard of one poor chap who rented a house for two years only to find that the renter had already sold the house to someone else.

Originally Posted by biffo

I think you may be confusing several things here.

First no house owner in their reasonable mind would do a short term lease thru a notaris - this would create a 10% tax on the lease value.

Second notaris fees are only payable on completion so even if it was through a notaris the 1 1/2% fee to cover the notaris fee is immaterial.

Third even if you pay the 30% after signing contract, property law in Bali is such that he can get you out any time he wants - your only recourse is recovery of your rent - even through a notaris a Hak Sewa lease is not registered at BPN so is not really enforceable.

Does this mean notary or no notary - there is basically no protection when renting a house/villa in Indonesia.

I'm renting a beautiful but expensive villa for one year. I asked the owner if he would mind if we had a notary draw up the contract. He was not adverse to the idea but did find it unnecessary & advised that it would not be a problem if it was at my expense. The owner is Spanish has quite a few villas - says he has several rented out with only the stamp and has never had anyone ask to have a notary handle the contract before. I have no reason to doubt the owner. Actually the villa is not yet finished (due for completion mid December), he also owns the villa next door and I have meet both him, his long term staff and the architect many times. He also wants a 10jt deposit on top of the years rent. I have no problem with this as the villa will be fully furnished & equipped.

I know it is standard practice here in Bali to pay everything up front....but I have to admit that I am a little nervous handing over almost 30k. From reading the advice above - it sounds like it basically boils down to a leap of faith.

I'm trying to determine exactly what extra protection would be gained by having a notary draw up the contract?

If for whatever reason the owner wanted us out - what recourse would we have to recover our funds? And would the stamped and witnessed contract be as legally binding as one drawn up by a notary?