Buying villa without IMB

[davita]

we've wanted to move to Sanur for a while so we're always interested in property there. Today we went to see a long-lease Villa with a Realtor. We were impressed as the unfurnished villa was new and had been vacant for 2 years. It was perfect for us and I was very impressed, and eager to make an offer, until I asked to see the IMB. The realtor said she'd need to ask the (Australian owner's) local agent.

I'm now informed that it doesn't have an IMB and it hasn't even been applied for and will take 3-6 months to get. As the building is in a urban area and appears, at least to me, to be in compliance with local IMB permission, I cannot figure why the owner didn't previously apply....especially as they built to sell. Could there be a scam afoot?

The realtor said it's normal that owners apply for the IMB after building the villa....I think that's insane! IMO a building on leased land, without a permit to build, is worthless...in fact, it could be a counter-investment as it may cost the new owner to be de-constructed.

I said I'd think about an offer when the IMB is issued...

Any comments?

 

[spicyayam]

Maybe make an offer subject to getting an IMB. Perhaps the neighbors are refusing to sign the papers, or there is some other kind of problem. Unless it is a cheap local house when the building has little value I would suggest holding back.

 

[DenpasarHouse]

With our house the building process was well under way before the IMB was approved, I didn't have any say in it but I was told that this was definitely the norm. That said, it seems that they've recently become a lot stricter. The new project that just started in our perumahan had to have the IMB and the completed/finalised architectural drawings BEFORE starting. I was told that previously they only required basic structural drawings and they'd let you submit the completed drawings later.

My guess is that they'll be able to get the IMB but that they'll be bled dry by whatever agent they hire to "fix" the situation.

 

[davita]

Thanks everyone...I've been told by many that it used to be norm.....but I'm thinking that boat may have sailed. I was thinking to make an offer, subject to the IMB, but isn't that risky if I have to wait 6 months?

Back in 1974 I bought some village land in Hong Kong and designed my own Spanish Villa. I was told by the contractor that my extra couple of feet extension at the roof level would be approved as his brother worked in the permit office. Just before completion the Independant Commission against Corruption (ICAC) put his brother in jail for graft and it took another year to get the permit....meanwhile, I couldn't mortgage from the bank until I had the permit, so the contractor had to wait for his money....:greedy_dollars:

I've searched for the following but couldn't find a satisfactory answer.
Who, in fact, has to apply for the IMB for building on leasehold land....Is it the Hak Milik title holder or the Leasehold title holder and how can I find if the application has even been submitted?

 

[Markit]

If you like the place then take it.

Make sure you have the payments on a monthly basis until the documentation is completed.

Only risk to you is that you might have to move out again but if the building has been empty for 2 years then the owners will be very keen to get someone in and should be able to make you deal you can't refuse.

Perhaps send the missus on a fact-finding mission first?

 

[davita]

Thanks Markit...you make it sound simple. Can you explain how to pay monthly till the IMB is approved...this isn't renting... it's a 27 year leasehold that's for sale.
If you can lend me like Rp.3 Milyar that would mean you're a good pal. I promise to repay with decent interest when my villa sells....that's a guarantee...:devilish:

I was thinking of making an offer, subject to getting the IMB in a given time-scale, and depositing, say, 10% of the offer in escrow with MY notary, whom I can trust. Will that work in Bali...can legal contracts be written like this?.
It's normal in Canada/USA except Realtors/Lawyers are regulated by Government and by law.....here, not so much!

 

[spicyayam]

Will that work in Bali...can legal contracts be written like this?

My wife had a client one time that did just that as the house was right on the beach. Eventually the IMB came through and they finalized the sale. I believe the buyer paid for the initial IMB costs which were then later deducted from the final sale price.

Perhaps talk to the immediate neighbors to see if they had any objections to signing off of the IMB.

 

[davita]

Thanks spicy...I'm getting more confidence from all of you.

I'm not even sure that the IMB has even been applied for yet. My info is the villa next door is also owned by the same person, and vacant, so doubt it has an IMB.
I've asked the Realtor to advise the situation...IMO, that's their job.

 

[werecoming]

Slightly off topic but if the bali price boom continues unabated then how does a villa sit empty for 2 years? If the owners are only sorting out the IMB when a genuine buyer appear then you would think that there haven't been many, if any in that 2 years.

 

[sakumabali]

Slightly off topic but if the bali price boom continues unabated then how does a villa sit empty for 2 years? If the owners are only sorting out the IMB when a genuine buyer appear then you would think that there haven't been many, if any in that 2 years.

my villa is empty since 2 years too...could be for many reasons. a divorce or perhaps the lack of an IMB (in my case both), I applied for my IMB more than 2 years ago!
First I had a couple of agents who assure me each month "that it is practically done". Than I went myself to Sempidi only to find out that the whole system is a mess in Badung at least...I even had an existing IMB when I bought the house but because I did some structural changes they told me it'd be better for me to apply for a new one. Now as they they change from ciptakarya to PBBT it's getting worse. The problem is that so many people suddenly "discover" that they need an IMB to sell, thousands apply suddenly (some after 20 years), without friendly "persuasion", endless phone calls and SMILES the officials won't do nothing

 

[sakumabali]

double post

 

[sakumabali]

I'm not even sure that the IMB has even been applied for yet. My info is the villa next door is also owned by the same person, and vacant, so doubt it has an IMB.
I've asked the Realtor to advise the situation...IMO, that's their job.

No Davita it's not the job of the realtor to provide the buyer with an IMB (after they listed it, they should have rejected the listing at first place if they'd be professionals)
it's the job of the seller. The sad truth is that they often simply can't do this - even if they want or pay extra cash. Cause everybody is loaded these days, there are waiting lists for people who paid already more. This could take a long time....so I would take the advise from sb above. Make an offer for a house WITH an IMB, pay a yearly rent (installments) and the rest after it's done. which will be never perhaps if the villa has a freehold owner. Problem is that you - as a foreigner - might have trouble as the "owner" if police, banjar, government people continuously show up and want to see the "papers" which you don't have of course so need to pay a "penalty"

So I would make very sure that you are the lessee as long as they don't provide the papers (so you can send these people straight back to the old owner) oh and yes the "rent" should be lower than it's worth it ))

As evth here is grey : without an IMB the owner is not allowed to rent it even so that could mean that you are theoretically forced to leave the house AFTER you paid some money

 

[davita]

Thanks sakumabali...wise advice.
btw I didn't mean the realtor applies for the IMB but she should keep me informed as to its status.

I like the idea of just renting on an annual basis, at the same fraction of the total leasehold agreed price, until an IMB is produced...then I pay the final sum. Is that feasible and can a contract be written that can accommodate that idea?

It is possible to say to any inquiring official that my friend is just allowing me to stay in his house as a swop and he is staying in mine somewhere....will that work?

 

[sakumabali]

Theoretically everything here is possible...depends how long the lessee is here and how good his bahasa is - or if it's close to Idul Fitri or Galungan
Or if the inquiring official had a fight with his wife or not...that's the bad part in it. Legally it's not possible to rent it out (officially you need pondok wisata).
Nobody does it and nobody got ever bothered (as long as your name is wayan or ahmad and not James) so we are here almost every time depending on the mood of the people in charge. That's very frustrating sometimes. As you can imagine you get fired in the western world if you don't work properly or even don't work at all. Here in Indonesia these people got backed up by their colleagues and subordinates. I have the strong suspicion that these people in charge who need to sign / approve are actually working somewhere else! So they're are always "sibuk" "baru keluar"...contract wise I see there no problem at all...I can recommend Anneke Wibowo in Jalan Teuku Umar, Denpasar. Good luck

 

[ferdie]

No IMB means cheap rent, but just like sakuma's advise, you should agrees on the whole price but only pays a year or two and pay the rest when the IMB is released.

 

[davita]

Thanks saku and ferdie....you've given me a good line of thinking.
I can offer a monthly rent and move-in with all my furniture with a contract which says the monthly rent will go to the capital sum we have agreed, as soon as the IMB is issued. I can also put a deposit of 10% as good faith with my own notary...to go to the seller when the subjects are removed. The remainder of the capital shall then be paid when the leasehold is in my name.
Meanwhile, my own unfurnished freehold villa (with IMB) can go on the market.

 

[Markit]

Care to share with us why you've decided to "grade" (up, down, around, etc.) from home owner to renter?

How about a link to this luxury palace (oh, or was that the one in Jak?)

 

[davita]

Care to share with us why you've decided to "grade" (up, down, around, etc.) from home owner to renter?

How about a link to this luxury palace (oh, or was that the one in Jak?)

I'd like to live in Sanur, on the beach side of the by-pass, and there doesn't appear to be many Hak Milik property for sale in the areas I have interest. At least within my budget.

The 'Luxury' apartment is in Permata Hijau in Jakarta but that isn't for sale. The reason it is 'luxury' is because that was how it was described by the Developers/Realtors when I bought off-plan prior to construction...I still find the word amusing as it is arbitrary without real meaning.....so I continue using it because the Realtors still use it, and they are 'professionals'....:icon_e_biggrin:

Living in Indonesia, as a foreigner, is a debate we've all had before and most come to the conclusion to live in Indonesia we have to accept the harsh realities of how they (Indonesians) deal with law, property, religion, logic and driving.
As I implied to Gurkha when he said the place is a ****hole...that was his unexplained opinion...however, some others, myself included, are sometimes deluded into thinking it is 'heaven on earth'...it isn't.....and, imo, smart people should keep their eyes open for something better....:indecisiveness:

 

[ronb]

.............................

I've searched for the following but couldn't find a satisfactory answer.
Who, in fact, has to apply for the IMB for building on leasehold land....Is it the Hak Milik title holder or the Leasehold title holder and how can I find if the application has even been submitted?

I think it is the lease holder because he/she owns the buildings. The Lessor only owns the land. But I could be wrong.

 

[sakumabali]

I think it is the lease holder because he/she owns the buildings. The Lessor only owns the land. But I could be wrong.

you are correct BUT if the lease holder is foreign he can only apply in the name of an indonesian. That's brilliant. Not