Possible to raise a built house at the end of a land kease?

Beck

Imagine a bule leases (Hak Pakai certificate) a plot of land for an initial period of 25 years. The bule then builds a house on the plot and lives there happily. At the end of the lease the bule want to extend the lease for another 20 years still Hak Pakai with a certificate. 1 What mechanism is used to determine the price of the extension? I have heard "fair market value" but is this based on the land alone or the land plus building? Who determines fair market value? It is not too hard to imagine the lessor and the lesse having different opinions. And a third party would surlely only look for their own fees or bribes? And what if the lessor simply says no or goes awol? 2 If there is an included preagreed price for the extention in the lesase contract. How legal and enforceable is it in reality 25 five years down the road? Do anything change if the extention was prepaid? 3 Imagine the bule lesese and local lessor disagree about the price or conditions. Can the bule then simply raise the house at the of lease period? After all the lease was only for a plot of land and the land itself is still there. 4 I see all kinds of lesase periods up to forty yeas or more. But these are just a simple contracts without a certificate right? And you are thus basically at the mercy of the honesty of the lessor?

Markit

Hey Beck you've been waiting for an answer so I will give what little I know, not being a leasor. 1) I have heard that the re-lease price is previously agreed in the original lease. Either as a percentage of the original lease (for instance %120) or lump sum. The market value would be based on a similar plot of land (and only the land - not any buildings on it) in your area - there is generally several plots of land around you that are also for sale/lease to base the calculation on. Just ask at Ray White or any of the other agents and they will happily quote you all the prices around. 2)How "legal" or enforceable is anything here? Best is to keep an honest, open and FRIENDLY ongoing relationship with your owner and all will be good. If you do get to the stage where you are litigating against a local then kiss your sorry ass (and your money) goodbye. 3)Yep, build in wood and take it down when you are done. 4) Lease hold law is in the process of changing and it appears that longer lease periods will be part of it - but watch this space and wait. But what do I know? Markit

no.idea

Beck, in 25 years the land owners can name any price they want. This is why the term with "lease renewal option" may as well read "buy me an ice cream and piss off". Of course you may also have become very close with the people you lease it from and happily negotiate another term of lease. It is your house, you can knock it down, move it or simply wander away. This will depend on how you view things in 25 years time.

Beck

At least the option of knocking the house down would give me some bargaining leverage the lessor. And by house I mean a masonary house not a joglo. Also, what would motivate me to do any real maintenace on a house say the last few years of a lease? I can easily see the appeal for a balinese man to lease the land instead of selling it. Then his son will get a big payment sometime in the future too. Maybe there will be some changes to the lease rules in the future. I think 25 plus 20 years upfront has been mentioned. But who knows? If it comes true one day then my guess all the existing shorter leases will take a serious nose blow in terms of value. Better to sitt out and watch. Better to rent and watch the building boom juice the supply side beyond any reason.

Smoke

hopeing and RI actually changing lease rules for non Indonesians may or may not ever happen in our lifetimes. A few short years ago( 2) a non Indo was able to legally own a motorbike in thier name with a KITAS . but that changed for the worse . a motor bike costs $1,200 on up .

werecoming

Beck wroteIf it comes true one day then my guess all the existing shorter leases will take a serious nose blow in terms of value. Better to sitt out and watch. Better to rent and watch the building boom juice the supply side beyond any reason.

It will be very interesting to see what impact this has on the market when the older leases start to require renewal. Land prices have skyrocketed in the lease period so there may be a few who cannot afford the renewal price. You would think this could put a bit of pressure on the market.

Normy

@ Smoke, not on topic but what did a motor bike cost before rule change?

Smoke

the same but RI took from Kitas Holders owning a vehicle. some scooters start at 1,200 usd . If RI not even want you to own a vehicle ,I can only imagine on owning land or leasing land .

davita

Smoke wrotethe same but RI took from Kitas Holders owning a vehicle. some scooters start at 1,200 usd . If RI not even want you to own a vehicle ,I can only imagine on owning land or leasing land .

Please double-check with your police escort friends Smoke.:abnormal: My understanding is this only applies in the Province of Bali. It isn't intended to deny foreigners.... it is to restrict motor vehicles in BALI to ALL non-Bali KTP's. A KTP Asing is available to all Kitas/Kitap holders...ask an informed agent. I'm in Jakarta, till tomorrow, and we checked with Toyota a few days ago. There is no restriction to buying a new car here (Jakarta) but they say we will not be able to change the 'B' plates to "DK' without a Bali KTP; like we did before.....that's new!

Smoke

[MENTION=11670]davita[/MENTION] In bali must use ktp or if your smart use a Kitem ( ktp tempory stay permit valid 3 months cost 55k)I only know about Bali as no interest in Jakarta area( and this Balipod) when I was at a few dealers very recently they all needed a Bali KTP or Kitem to register the vehicle in Bali since I inquired since my wifes KTP is Lombok and we wanted Bali plates. In Bali the prices are noticeable a bit higher then Jakarta due to "taxes and fees" From what i understand Bali will be cracking down on none Bali plates (not sure it is even possible) and by the way I have a KTP already .no need to ask an informed agent or any agent . Simple and easy to get

Populaire

Hi Beck, We have previously been advised by a Notary of one of our clients that demolishing and / or removing a structure at the end of a lease is not permitted, even if you were the one that made such improvement to the land / property. It might be worth checking as such may have been specific to that given lease agreement and may not be the case across the board. All the best, Populaire..