Advice from Bali Residents

davita

Re: post # 1 from Bangkokbonkers Welcome to the forum and the trials of owning property in Bali I'm surprised a person of your obvious acumen and experience would have even contemplated purchasing such a dump...10 years lease is hardly worth the US$500 you deposited....never mind what else it will cost. It doesn't have an IMB nor Pondok Wisata and unlikely to ever get either.....that is a tear-down and rebuild project. Once bulldozed the land value for 10 years lease is all it's worth. If you still want to carry on you could build a brand-new Joglo and, if still owned after the ten years, it could be removed and relocated if the land lease was not extended.

tintin

Go away from this mess. This is a textbook example of a Bali rip-off.

spicyayam

You can find out in advance if you can get a Pondok Wisata licence before you purchase the property. Remember that it needs to be in the name of the owner so you need their co-operation when it comes to paying taxes. Davita's suggestion of leasing land and buying a building that can easily be moved I think is a great idea. Just make sure in your agreement with the owner that you have the right to remove any buildings once the lease expires. If it is in good condition, you should be able to sell it easily enough or move it to another location.

spicyayam

BangkokBonkers wroteWould you believe them to make it right now, and trust them to fix structural problems in the future given it states that in the contract?

No. I am sure they have no intention of doing anything to the house. You will never be able to force them to either. Sorry, but this place sounds like a nightmare. If it is doing your head in now, honestly it seems better to just walk away...

Mark

Run away even if it means you lose your $500 deposit. It will be the best financial decision you've ever made.

BangkokBonkers

Hello everyone. And thank you for allowing me to join BaliPod. I have lived in SE Asia all of my life. Born and raised. Last week I made my 47th trip to Bali since 1986. I've watched the island grow with boundless enthusiasm - but the traffic sucks now - and yes, as much as it's become a bit of a beast in its growth it's still an island I love. So here's the quandary - Over the past 6 months I became a little jaded with renting villas for my frequent annual visits - and I put heart and soul into looking at property and reading the ups and downs, joys and tears of folks like you that have invested or retired or just live there for the love of the place. So - last week I found my ideal property. A 24 year old, 200sqm Joglo-styled house sitting in 3 Are of land with a knackered pool in Badung regency. In fact, the house is pretty much knackered and needs some TLC and I estimate at least Rp200m to 300m thrown into her (excluding furnishing). She's bare. There's an upstairs bedroom - a small one - reached by a wooden spiral staircase. I made 4 visits to this place over the course of 4 days. First three visits all were hunky dorey. The groundfloor is all concrete with the roofing and upper floor all timber. The existing 2nd floor bedroom has large wooden planks for flooring but do 'bounce' which is a bit disturbing. On the last day I met the owner and paid a nominal USD500 'deposit' to secure it have it removed from the market. They accepted. We negotiated what should and should not go into the contract and I walked away with a little receipt. One of the key items I wanted in - and they accepted - was that over the 10 year lease they would be wholly responsible for the structure's upkeep, including wall boundaries. They accepted. (My notary was gob-smacked with that). I might add, they're Balinese and judging by the size of their property where I met them, the vehicles and Harleys etc - well to do. I even managed to open a bank account without KITAS, and appointed a very capable notary that members of this forum have also recommended. 4pm of that day, I called the staff of the owner to open up the house so I could make rudimentary measurements for an extension to the top floor bedroom to expand it and add a bathroom. Met him there and holy mother of God - the first thing I noticed were termite droppings all over the spiral staircase. Further inspection revealed one or two other locations where the termites had been having a buffet. The 3 previous visits they had evidently cleaned up the droppings. See pics attached here. Further! (This gets better) - I measured the land myself with the aid of the staff. I was told it was 300sqm. However, and the staff now know this and look a tad bemused, it's just shy of 250sqm. I immediately messaged the notary and told her to pause her work until I sorted this out with the landlord. The husband was useless. All he cares about is the cash. His wife, however, (whom I met on the last day to go through the contract and pay the USD500) was charming and efficient. When i called him from the site and even sent over Whatsapp photos of the termites, he implied it was up to me to fix the termite issues. His wife, however, is on the case now and sorting it out. The property doesn't, as I found today, have an IMB - I was told they have it. But, they will sort that out and get it. With the IMB will also come the official land dimensions - as measured by the authorities? I have a horror of termites and the damage they can cause. They said that in my absence this week and before my return next week, they will arrange for pest control to come and site survey and when I am there next week, do the spraying as I watch. The owners are expecting me back next week to ostensibly sign the contract and pay 50%. (They have agreed for me to pay the balance 50% after the renovations were done on the pretext that if I found any issues that they would have to fix them before the balance was paid.) I get the impression they are seriously keen to lease this property and the vacant plot next door and to date, I appear to be the only one biting - not only the termites :) So there's the story - and what I would request of you is simple advice 1) Would you continue the deal proceed given they purposely withheld the issue of termites and even cleaned the place before I went over 3 times to see it. Given they say they will fix this, replace the spiral staircase with a metal one and replace the timber and that they will ensure the termites (which are subterranean) have been dealt with - they assure me it will be safe to build the 2nd floor bedroom extension. (They have agreed to pay for all structural defects during the lease tenure but I have to take out insurance for the property and my own possessions, 3rd party etc). Would you believe them to make it right now, and trust them to fix structural problems in the future given it states that in the contract? (Indonesian law tends to favour locals in litigation I have heard) How effective and professional are pest control contractors in Bali? 2) The land size. They will make an IMB now (I have no idea how long that will take) but I am not sure if they will reduce the Are by 0.5. Is there a way to enforce this? (It's a saving of around Rp20 juta per annum on the correct size). 3) The bouncy wooden flooring on the 2nd floor. Right now it's empty. But add in a teak bed, two 100kg Bules and I wonder if it's the termites at work - but we could see nothing up there. The Termites were evident only downstairs where the wooden spiral staircase and where one wooden column was sunk into the ground. 4) I do need a Pondok Wisata on this. There isn't one now. Would you recommend I make a deal for all the headaches this has given me that they also apply for this for the property at their cost? I believe it's property linked and not name linked. Or am I wrong on this? I read somewhere it's easier if the property owner (especially Balinese does this) Don't ask me about the 'agent' who has done zero due-diligence and very obviously takes the side of the husband. She's Indonesian and not a Bule. The wife, however, loathes her - as I do. But reading this forum and a host of websites, it seems real estate ethics in Bali are somewhat lacking. So I deal direct with the owners and they take care of the agent's commission. Fine by me. Many thanks folks for any input you may have. This is doing my head in.

BangkokBonkers

davita wroteRe: post # 1 from Bangkokbonkers Welcome to the forum and the trials of owning property in Bali I'm surprised a person of your obvious acumen and experience would have even contemplated purchasing such a dump...10 years lease is hardly worth the US$500 you deposited....never mind what else it will cost. It doesn't have an IMB nor Pondok Wisata and unlikely to ever get either.....that is a tear-down and rebuild project. Once bulldozed the land value for 10 years lease is all it's worth. If you still want to carry on you could build a brand-new Joglo and, if still owned after the ten years, it could be removed and relocated if the land lease was not extended.

It has a 10 year extension option up to 20 with a clause on the contract that I have first dibs before up for renewal. Might I ask why you feel it wouldn't receive an IMB nor a Pondok Wisata? I'm a complete newbie to property leasing - and my first foray into Indonesia's property market - so yes, it's a steep learning curve. For what it's worth, my heart loves the location and the property. I do want something with renovation potential. But the mind says run - as agreed unanimously here :) However, the plot of land next door - same owners - and a slight larger spread is an option. But I am getting wildly varying build-cost ideas - ranging from Rp3 Juta / sqm to Rp7 Juta / Sqm which isn't helping the decision-making process.

BangkokBonkers

harryopal wroteBangkok Bonkers, if you are attracted by the notion of having a removeable house built it would probably be as well to check the status of whatever access road, path or lane might be used to remove the building.. Several life times ago, working in the rag trade in Melbourne's Flinders Street, there was a guy bought a building from a shrewed businessman who did not tell the buyer that the access lane was owned by that same businessman who then had the buyer over a barrel in negotiating a price for use of the lane.

Brilliant! :D

BangkokBonkers

spicyayam wroteYou can find out in advance if you can get a Pondok Wisata licence before you purchase the property. Remember that it needs to be in the name of the owner so you need their co-operation when it comes to paying taxes. Davita's suggestion of leasing land and buying a building that can easily be moved I think is a great idea. Just make sure in your agreement with the owner that you have the right to remove any buildings once the lease expires. If it is in good condition, you should be able to sell it easily enough or move it to another location.

Thank you! I didn't know about the Pondok Wisata check pre-purchase. Could you tell me how to go about that? I have a runner in Bali to do errands of this nature so I could tell him. Terima Kasih Banyak! Indeed - Davita's idea is neat. I'll run it by the Notary next week.

harryopal

spicyayam wrote Davita's suggestion of leasing land and buying a building that can easily be moved I think is a great idea. Just make sure in your agreement with the owner that you have the right to remove any buildings once the lease expires. If it is in good condition, you should be able to sell it easily enough or move it to another location.

Bangkok Bonkers, if you are attracted by the notion of having a removeable house built it would probably be as well to check the status of whatever access road, path or lane might be used to remove the building.. Several life times ago, working in the rag trade in Melbourne's Flinders Street, there was a guy bought a building from a shrewed businessman who did not tell the buyer that the access lane was owned by that same businessman who then had the buyer over a barrel in negotiating a price for use of the lane.

Bali Retirement Community

Listen up! I have lived in Bali since 1998 and built many projects all with obtaing IMB (building permits) and Pondok Wisata (rental license). You are wasting time trying to obtain information on these permits. Here's the low down: 1. Only the owner(s) can obtain any permits required. The really important question is who are the real owners . . could be 12 family members. 2. The are zoning issues to deal with before you spend anymore time on this crazy whim you have. No IMB (building permit) unless you get a zoning approval in writing. It will take months before the owners will get any paperwork on this believe me. 3. Termites you can forget getting rid of them in Indonesia, I never use wood in any of my projects just for that reason your going through now. 4. What are you paying . . . for peeps sake man lets us know so we can offer advice on that too. 5. Building costs 3 Million - 7 Million M2 are you nuts! Run Forrest Run! Get the hell out of there and look somewhere else.

Mark

Bali Retirement Community wroteListen up! I have lived in Bali since 1998 and built many projects all with obtaing IMB (building permits) and Pondok Wisata (rental license). You are wasting time trying to obtain information on these permits. Here's the low down: 1. Only the owner(s) can obtain any permits required. The really important question is who are the real owners . . could be 12 family members. 2. The are zoning issues to deal with before you spend anymore time on this crazy whim you have. No IMB (building permit) unless you get a zoning approval in writing. It will take months before the owners will get any paperwork on this believe me. 3. Termites you can forget getting rid of them in Indonesia, I never use wood in any of my projects just for that reason your going through now. 4. What are you paying . . . for peeps sake man lets us know so we can offer advice on that too. 5. Building costs 3 Million - 7 Million M2 are you nuts! Run Forrest Run! Get the hell out of there and look somewhere else.

Fully agree with most of your post but on point 5 I'd be curious to hear your take on current building costs in Bali. Am I wrong or are you saying that 3-7 juta psm (which is a pretty big range) is nuts as in too high?

hadodi

To save headaches forget it, write it off and find another one, which you certainly check FIRST. Good luck