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Thread: advice needed in buying property in bali

  1. #31
    Addicted spicyayam's Avatar
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    Quote Originally Posted by Fred2 View Post
    The reason people need a prenup is to protect property in the indonesian spouse name, before & during marriage, purchased, inherited, gifted and any other way you acquire land.
    So remember the law in this country is when you marry, everything becomes 50/50 (unless you have a prenup). So your wife owns property before you marry, two years down the track the next door wants to extend there property, he goes to he's mate at the lands office & makes a deal. You & your wife had 12months from the time of your marriage to remove her name from the title. Now this is were your specialist in mixed marriage notaris steps in and.......stop you from losing the property because the law is different for you????? or dose she pay you for your lose????
    I will email her if she has not skipped town with all her money.
    It all sounds good until the shiiiit hit the fan.
    As you know my wife & do not have a prenup, the title of house we have in Surabaya is still in the developer name (indonesian's do this so they do not pay tax) but as a westerner I would like it to be in my wife's name only. We went to the corporate office in Surabaya (not some small notaris) & the news was not good. So I went to Jakarta to the head office ( a massive building above there own shopping complex). WE sat down with one of there fifty or so lawyers, he's english was very good & he explained the law & ways that we can get around it. The out come is if you do not have a PRENUP, you can not hold land in your wife's name.... I wish it was different.
    How about getting a divorce, then get the prenup and then re-married? It would be interesting to get notary's opinion on this.
    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.

  2. #32
    Addicted davita's Avatar
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    Quote Originally Posted by spicyayam View Post
    How about getting a divorce, then get the prenup and then re-married? It would be interesting to get notary's opinion on this.
    darling yu no i lobber u but u xpect a devorce so i half my property.... u clazy!

  3. #33
    mat is offline
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    Quote Originally Posted by spicyayam View Post
    How about getting a divorce, then get the prenup and then re-married? It would be interesting to get notary's opinion on this.
    I asked the notaris about this and she said it was a valid option.

  4. #34
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    Quote Originally Posted by dbkbali View Post
    Nominee agreements are illegal in Indonesia, as any agreement where the purpose is to violate the spirit of Indonesian law, can easily be ruled null and void. This is the case for foreigners buying property and is even codified in the regulations and laws for foreign investment issued by BKPM, as it used to be common practice for the restricted sectors of Indonesian investment that, a foreigner would find a nominee to hold the required local portion of that investment. On the corporate side if you want to see the types of problems that can occur, when using a nominee, just google (Astro, Lippo and TV).

    With respect to real estate, whilst such an arrangement could be found illegal, you again just need to google, to find cases where people have had problems. From my own experience as an investment consultant, I have seen several such cases, which are typically ongoing, as legal challenges, and given the amounts at stake, are typically challenged right to the supreme court (civil) and if not successful there, a new series of cases commence in the criminal courts (usually alleging theft and fraud), these legal undertakings can often take many years to be resolved (5+), during which time your ability to sell or do anything with the underlying land could be impaired.

    A large percentage of people subject to nominee agreements will not have a problem, as any problem would require the nominee to commence actions in the legal court system, so typically the problems occur, 1) where large amounts of investment are involved, 2) the underlying land is of strategic interest to a 3rd party, or 3) the nominee, intended to screw you in the first place and/or has a desperate need of money or has other liabilities/problems in other businesses or transactions they may be involved in (other business, gambling or other debt). I recently heard of a case that implied, there are money lender's in Jakarta, who will lend against "nominee" agreements (where there is no debt registered on the underlying land certificate), as they have legal team's in place, that can take the necessary actions to quickly invalidate those agreements and kick the tenants off the land.

    The critical mass or the number of people using nominee agreements should not be of any comfort, as legal precedence, has no bearing in Indonesian courts. Normally, this is wishful thinking by people who own their own properties via nominee arrangements or have an interest in selling real estate or earning a fee, as a notary or lawyer, to put such arrangements in place. Keep in mind that lawyers and notaries,unlike in developed countries, normally don't carry liability insurance, so if later your agreements are ruled illegal, they typically have nothing to lose, and therefore their incentive is to tell the clients what they want to hear, and that is "don't worry - you are safe".

    If as a buyer of a property, notwithstanding the legal risks you do decide to use a nominee arrangement, definitely a mortgage and lease arrangements can protect you, however, you need to make sure that the mortgage is actually registered at the land office, which means the payment of a registration fee (which I believe used to be 1% of loan value) - you also need to ensure the loan is legal and be aware that whilst not normally enforced, the mortgage may create a Indonesian tax liability. I am aware of several cases where in order to save the fee the notary prepares and executes the agreements but never actual registers the mortgage at the land office - again telling the client they can save money this way and "don't worry you will be safe". Holding of the land certificate alone, is not adequate protection, as there are procedures that can be followed, and that might be easily facilitated by corruption, to easily procure a new land certificate if your nominee wanted a certificate to secure a loan against your property or to sell the land without your approval.

    If you are using Austrindo, or taking comfort from any lawyer in Indonesia, I recommend you read the book "Eleven Demons - Secrets of Deincarnation in Bali - by Michael Donnelly" - I am not sure whether this is available in Indonesia, for obvious reasons.

    This may not be what you want to hear, but the reality is that Indonesia does not provide a good environment for foreign investment, especially in property, and if you are not comfortable with the legal risks that you potentially might incur (if your nominee happens to fit the criteria detailed above) the safest way to procure rights to property, is a Hak Pakai arrangement, which will increase your transaction costs significantly.

    Very silly thing to say that Indonesia is not a good place to invest. As a developing nation myself and several of my associates have had plenty of successful investments here.

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