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Can anyone explain the purchase process in Bali???

Discussion in 'Owning Property in Bali' started by Tina Amer, Aug 28, 2017.

  1. Tina Amer

    Tina Amer New Member

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    Hi All,

    Ok so I have come to an agreed amount with current owner and now I am trying to find out the process from here. The owner emailed me a said.....

    "From memory, I think this is how the procedure works:
    On receipt of a 10% deposit, payable in Australia, they proceed with the process of preparing the transfer of documentation into your name, and for this they will require your full details (address, date of birth, etc, etc). When those deeds have been prepared the balance is payable by bank transfer to the Commonwealth Bank in Kuta, and on receipt of that, everything is lodged in your name. Tricia and I will be in Bali from 25 October to 31 October and can sign any necessary papers at that time, and then everything, including an English translation will be couriered or emailed to you."

    My question: does that mean I do not get to see paperwork until all money has been paid? if not, when in the process should I be seeing some paperwork?????
    I know the current owner and it's not that I don't trust him, it's just that it's a new process for me and I was always told never pay anything until you have read the fine print.
     
  2. spicyayam

    spicyayam Well-Known Member

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    Are you buying a villa or something? How you "purchase" it will be largely dependent on the title of the property?

    It could be your friend doesn't know the process either. Get a lawyer/notary to check the documents before you pay a rupiah.
     
    Tina Amer likes this.
  3. tel522

    tel522 Active Member

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    ya I agree , be careful , You appreciate foreigners cannot own property here ? only lease .
     
    Tina Amer likes this.
  4. Mark

    Mark Active Member

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    The transaction needs to be processed by a notary in Bali (in the regency where the property is located). And, as noted, above, foreigners can't own land. Strong recommendation to you is to meet with a notary to understand the process and have the relevant documents prepared and signed. Don't hand over a penny unless you have a written agreement, prepared by the Bali notary and signed by the seller. Paying someone directly in Australia for a property in Bali sounds like a tax evasion mechanism and anyhow should not be done without the aforementioned written agreement. It sounds like you are entering a danger zone...be careful! Oh, and don't do anything that you wouldn't do in your home country regarding a real estate transaction.
     
  5. davita

    davita Well-Known Member

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    We do not have enough info to guide you on all aspects but, if you are buying property in Bali, all money should be deposited through the Notaries escrow account and never direct to the seller. Same anywhere.

    One of the documents they will provide is an Akta Jual Beli (Bill of Sale). You also want to ascertain that the villa has a current Izin Mendirikan Bangunan (IMB) which includes a document, and a plate attached near the entrance to the villa.
    Most Notaries will provide all this but it's best to show you have information and willing to be involved...keeps them on their toes.

    If you plan to legally rent it out in the future you will also need a Pondok Wisata permit. I know many that rent out villas without but that's an illegal act and the authorities are more and more looking into this...be careful.
     
    #5 davita, Aug 28, 2017
    Last edited: Aug 28, 2017
    Tina Amer likes this.
  6. ronb

    ronb Active Member

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    Good advice above. It sounds like you are trying to manage a property transaction in Bali while you're not here. Not a good idea. Jump on a plane and come and oversee it all.
     
    Tina Amer likes this.
  7. Tina Amer

    Tina Amer New Member

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    Thanks Spicey - yes I am arranging to use my bosses Notary - he has "owned" properties in Bali for many years
     
  8. Tina Amer

    Tina Amer New Member

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    LOL yes I realise that :) thank you
     
  9. Tina Amer

    Tina Amer New Member

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    The villa comes with a valid permit already - I made a point of confirming that as we do want to lease it to guests :) thank you
     
  10. Tina Amer

    Tina Amer New Member

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    I have arranged to fly over in two weeks time. No money will exchange hands until I get there first and oversee paperwork :) thank you
     
  11. Tina Amer

    Tina Amer New Member

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    Thank you all for your advise and suggestions, you have all been most helpful :)
     
  12. DenpasarHouse

    DenpasarHouse Active Member

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    Sorry if I've missed it, but it's not clear if you are "buying" a villa under a nominee type system or you're leasing a villa.

    Just in case you're "buying", here's a recent thread that has some relevant information:
    https://balipod.com/forum/threads/h...-attractive-investment-for-australians.12214/

    This article had a good overview of the legal issues, but it seems to be offline at the moment:
    http://www.balidiscovery.com/messages/message.asp?Id=17029
     
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  13. Tina Amer

    Tina Amer New Member

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    it is under a nominee set up
     
  14. davita

    davita Well-Known Member

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    Tina...if you are using the same nominee you can save a bundle of money as the Title Deed (Sertipikat Tanda Bukti Hak Milik) will not need to be transferred. The owner of the land is still the original nominee.
    All you need is to get the notary to change the names on the Deed of Statement (Akta Pernyataan) from the 'benefits to the use' from the seller to yourself and, of course, make the contract to buy those from the seller.

    Just as an aside...most people changing nominee titles are asking to change to Hak Pakai (Leasehold) on top of Hak Milik. This apparently gives an extra level of security to the foreigner....I'd check that out before confirming your buy/sell.
     
    #14 davita, Aug 29, 2017
    Last edited: Aug 29, 2017
  15. davita

    davita Well-Known Member

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    As Mark observed in post #4 the Notary will need to have an office in the regency the property is located...in your case Badung.
     
  16. DenpasarHouse

    DenpasarHouse Active Member

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    Right, so you'll have to forgive me, but this is a bit of a pet peave of mine. You should do a search in this forum for the word "nominee" and read all the results. Here's some things I've written in the past:

    Just to sum up, just because it's illegal, doesn't mean you won't get away with it. Because the Indonesian justice system isn't consistent (or even competent) you may very well be able to have an illegal arrangement held up in court. BUT you must be aware that in reality, what you're doing isn't legal. In my opinion, Indonesia is slowly but surely getting it's act together. The days of this sort of dodginess are coming to an end, you should asses whether you can really take the risk that they won't eventually catch up with you.
     
  17. DenpasarHouse

    DenpasarHouse Active Member

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  18. DenpasarHouse

    DenpasarHouse Active Member

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  19. davita

    davita Well-Known Member

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    We've had this debate here and other forums so many times.
    I would ask if your above 'outlined' statement has been a case tested in court? Many articles 'say' it's illegal but I've not yet heard where that has been defined in law.

    Notaries transfer Hak Milik title to an Indonesian, which makes them the rightful owners of the land, as conditioned by RI law, so how can that be illegal?
    I have two properties and have no illusion that my so-called 'nominees' are the rightful title holders. I simply have to trust that they'll abide by our contract statements to allow me to use the properties...which is only binding under contract law and not constitutional. It would be the same if an Indonesian wished to contract to another Indonesian to live in the property.
    The nominee can legally do anything he/she wants with the Hak Milik Title including giving away, inherit by family, or selling, and the foreigner is thus cheated...there has been cases like that and sometimes the foreigner prevailed in court to recover some money... but that's rare and the foreigner never got ownership.
    I've never heard of any case where a nominee has NOT been involved and the Indonesian authorities, on their own volition, have brought a case to court. There have been lots of blabbermouth politicians trying to get attention to this but no case in law to my knowledge.....but I'm happy to be corrected.
     
  20. DenpasarHouse

    DenpasarHouse Active Member

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    It's defined in the Indonesian Constitution. The highest law there is. It has been commented on by the relevant Indonesian Government ministers as illegal and they've threatened, but never followed through, to crack down on it.

    In light of this, I don't think it's a reasonable arrangement to recommended to others. There is no way any of us would recommend it if it were in our home countries.
     
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