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Land designation/zoning - agricultural to residential

Discussion in 'Owning Property in Bali' started by jaffa, Jan 6, 2010.

  1. jaffa

    jaffa Member

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    I am currently in the throws of negotiating on some land (land which is not arable before someone jumps in and chastises me for destroying the rice fields and away from Bali in any regard).

    Surprise surprise, the local wants his money yesterday but the land cert has the land designated as "agricultural" (sebidang tanah pertanian). nervous Bule (me) wants to play it safe and go through the whole IMB permit process but the deal will be lost if I delay 3 months and my solicitor is about as useful as a chocolate fireguard at the moment (Indonesian solicitor working for well known Aussie law firm). The Balinese way (mention nothing unless specifically asked about that issue) means I am none the wiser as to what might be involved in getting "tanah pertanian" (land agricultural) rezoned to "tanah Perumahan" (land residential)

    Funnily enough the adjacent land has a dwelling on it (a villa with foreign owner I would think) and there isn't a temple within 150m (although I'm sure BPN could probably invent one :) BUT I'm no fool and I don't think the idea of a precedent holds any water in Indonesian law ("oh. but you gave my neighbour permission to Build")

    I shouldn't be so jaded I guess. It's snowing outside here and soon i'll be back in paradise....

    I would welcome any knowledge/experience (or humourous jibes) about zoning and whether this is a good chance that this can be "re-zoned" (anything is possible in Indonesia I hear you say.......I'd like to try and do it without large payments to government officials)
     
  2. Jimbo

    Jimbo Active Member

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    Walk away from the deal and look for something that is less complicated. You also do not mention who will own the land on your behalf.
     
  3. spicyayam

    spicyayam Well-Known Member

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    I had a similar question before and you can find some information here: Zoning in Bali

    I have been told that you can just change the zoning type when you buy the land.

    Anyway, your notary should be able to provide you with the answer to your question.

    I imagine that most undeveloped land in Bali is zoned agricultural? Maybe Gilbert knows?
     
  4. gilbert de jong

    gilbert de jong Active Member

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    yep, that's true, and not complicated at all. When you buy the land, the zoning on the certificate can be changed into residential, no payoffs to gov.officials.
    Your notary is already aware of the fact you want to build your home there, he has to because he also makes the contracts between you and the nameholder, Forgot where, but I have translated some contracts for someone here, maybe it's that link Spicy posted? So he (the notary) also takes care of the new zoning on the certificate.
    I also need to tell that there is something like a 'cooldown' periode of 3 months after a certificate has changed zoning, this means that if anyone within the desa has a problem with you changing the zoning he/she could challenge this at the dep.agraria within those 3 months, but for this to happen you must have really pissed someone off.
    I assume you already have your drawings and estimate of costs of the house you want to build there? That's necessary to apply for your IMB. And without a certificate they won't give/sell you an IMB...wich is actually logical :) , how can someone have a building-license for said land if he/she doesn;t own the land...
    Oh..I just read you're working with a lawyer instead of with a notary?
    Some people always insist of using a lawyer? I don't get that, since the notary PPAT does evrything a lawyer can, ehm PPAT can does even more, and has alot more experience.
    anyways, you've got your answer.. feel free to check with a notary PPAT, but I am sure he will tell you what I did :) .
    friendly greetings, gilbert.
     
  5. jaffa

    jaffa Member

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    Gilbert/Scipyayam,

    You guys are great. Thanks. (Jimbo - why so risk averse?? you're much braver than 99% of people to go and live in a foreign land in the 1st place)

    Still plenty of hazards, but sometimes you need a little boost in confidence to navigate the minefield. Lawyer came back this morning with something akin (Indonesian word that has slipped its way into English dictionary) to what you are saying.

    Gilbert,

    I somewhat disagree with your rather knowledgeable comments regarding notaries. I had the same view as you prior to my 1st land transaction but have had my fingers burnt by a well known notary who likes to do interviews with various Bali media agencies. A notary works for the government and people should always keep that in mind. Having a strong grounding in legal and surveying matters, I thought I could do without a lawyer.
    I won't make that mistake again.
    IMO, there would appear to be a certain arrogance that permeates down through some in positions of power in Indonesia (notaries, government officials, police) that simply refuse to accept when they have made a mistake.........the difference between the integrity and honest of those who have nothing stands in stark contrast to those who have a lot (perhaps not that different to the West.....)........food for thought
     
  6. motormouth

    motormouth Member

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    I have bought and sold many houses here, all the land I originally brought was changed to allow a building to be erected. All transactions were done via a notary.never had a problem yet. The only thing slow at the moment is the issuing of the IMB, my latest villa took 4 months to get it...but as all builders I know here do, just keep building and when the guys arrive to check the IMB, rp300.000 keeps them happy for the next 3 months :D But like all things here there are variables, the guy next door paid 40% more for his IMB than us, even though his house and land are half the size, both were applied for by our Indonesian wifes.
     
  7. gilbert de jong

    gilbert de jong Active Member

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    I'm not saying you used cheap materials, but maybe he used more expensive materials in his house? In other words the price for an IMB (new regulations) is a percentage of the price of the total build price. Maybe your neighbor over-estimated his costs and therefor more expensive IMB?

    That implies you have done multiple land transactions, but you have no knowledge about zoning? not trying to be an ass, just asking sincerely.
    ??, Ehm, a notary works for who-ever pays him :wink: .
    about being knowledgeable...Thanks :) , imho I'm still fresh and a newbie on the Island, but have already lost count on how many land-transactions I have done (without lawyers), buying land-building a 'casa'-sell it. It's not my job, just helping Balinese people to get a piece of the pie. But whenever I do something I like/have to know the in's and out's of the process, legal, contracts, licensing, costs of materials etcetc...
    Anyways, if I understood the word 'akin', you are on your way to finalize buying your next property?
    Take care and goodluck and fun building your home.
    friendly greetings, gilbert.
     
  8. Markit

    Markit Well-Known Member

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    I feel that most of the answers here are true and all of them are well-meaning but for me the essence of the whole land buying scene here in Bali is to cover your ass and keep your money. Oh, and buy a nice piece of paradise to build on.

    With this subject there are no hard and fast rules governing what is allowed and what isn't so you/we seem to be forced to working in the grey areas - I hate this, personally and if you have gobs of dosh riding on it, then so do you. So my advice is:

    Insist on the prior owner being granted the IMB (from your plans, of course) before you pay one slim dime (apart from the deposit, keep that to $1000). If the deal falls through because of that then so be it. In my experience there are no more burning hot deals left on the island and any that appear so have something else going on.

    You don't say which county your land is in but also bare in mind that in Karangasem as from the first of the year they have stopped all developments within 3 km of a temple. There are a couple of things here to understand: What is a temple? What is a development?

    Similar regs are in force in the other areas on Bali.

    Again, you needn't worry about any of this if you demand that the seller get the IMB first - if he don't then Feckem! There is a reason. You don't abandon a bird in the hand for that bush bird :lol: not here, not anywhere!
     
  9. Markit

    Markit Well-Known Member

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    Sorry, but I gotta disagree with this big time! I personally know of 2 people that followed this advice that are now sitting on expensive land that they can not build on or sell because they can not get an IMB!

    Do not do this! Maybe local builders do but the operative word there is "local" I think.
     
  10. motormouth

    motormouth Member

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    Hi Gilbert, the guy next doors house cost @ 50% of the cost of ours. I think he went through the wrong channels. His architect and wife , both rang my wife today asking how we got our IMB so cheap..no idea why, maybe a bit of skimming going on with his contacts :?
    Markit, if a house is already zoned residential, never a problem commencing building before the IMB..however if this new dwelling was being erected next to or too close to a temple different story. A friend today told me about a new piece of land he bought.Paid rp 4Juta , and his land was changed to residential. Now I don't know how this was done by him, but result was he got it. :D
     
  11. gilbert de jong

    gilbert de jong Active Member

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    @motormouth... Hi, :lol: (sorry for your neighbor) 'wrong channels' , yeah I always say and firmly believe, "it's not what one knows, but who one knows".
    Your friend who bought that land has to hold his breath for the next three months, and hope that no one in the village has any problem with it. If it's on Bali, especially when the Banjar Adat comes into play, it's a lost battle when they have a problem with building there...

    as for the starting building without a permit, if one chooses to do so, even on residential zoned...it leaves room for playing/raising the price of the IMB...
     
  12. motormouth

    motormouth Member

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    Hi again Gilbert, I'm sure the guy with the new land will be ok, Brawa is really small, everyone knows each other and he is in with the Banjar. There is a new building(well 2 years old) , that went up across from the huge temple Perancak in Brawa...well this place would be @ 800sq metres in build, a monster...anyway all hell broke loose when the powers that be realized that it was too high and above the temple...woops, a change of owner and I'm sure some cash to the Banjar and she is now finished.. :D Cheers
     
  13. spicyayam

    spicyayam Well-Known Member

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    In Buleleng I think there are very few buildings with IMBs. If you see a house with the permit stuck to the front, you can almost be guaranteed a foreigner is living there :)

    I am not saying don't bother with it, but I just find it strange that locals don't bother with getting the right permits. You would think if you are going to spend a lot of money on a building, it's going to be a lot better for you to get the right paperwork?
     
  14. jaffa

    jaffa Member

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    Enjoying all the responses.

    Markit's general cynicism makes me laugh - I shall be just as cynical very soon I expect. Loved your latest blog entry about access. Ignore Mr Wilson's daft sense of humour - typical antipodean is my guess who thinks everyone except Aussies speak funny.

    Gilbert,

    My first land I bought off a foreigner - it is hemmed in on 2 sides by existing developments and it is zoned residential. I surveyed myself and did a lot of legal background work regarding various forms of contract that Notaries structure to offer foreigners security of tenure (what's a contract until its tested before court though??) :shock:
    I am not too concerned about IMB here for my 1st transaction. (another thing my Notary didn't advise about and now wants additional money - 25M IDR and counting for a simple Jual/Beli transaction!) :evil:
    Im only now starting to get into the minefield of zoning (and I need to revisit my legal book to understand how HGB relates to IMB permit) with respect to this other land.
    I could bore you some time over a beer regarding the errors my notary has made that would be picked up by any Western solicitor.

    I can only shudder at how many people lost serious money and land in Indonesia prior to the invention of the internet and advent of communication via online forums. Such an excellent way to collate information and experience with minimal effort.
     
  15. Jimbo

    Jimbo Active Member

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    I do not take risks until I have explored all the possibilities of removing any element under my control. I the examine what is left and make a decision on what is acceptable.

    I have worked in Iraq during that war with Iran and found the risks acceptable because I was nowhere near the border as an example and many other situations....but only after analyising the risk first. O never just accept them.
     
  16. jaffa

    jaffa Member

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    cost of land rezoning - (agricultural to residential)

    Right guys,

    Bit of a long shot but I have another question (because none of my Indonesian contacts seem to know!!)

    Solicitor has come back and advised that we can apply for change of zoning to residential (should be no problem as land has never been used to farm - too rocky).
    Price - 15M per 10 Are (with applications up to 20 Are at a time). funny how costs are always nice round numbers. Am I being cynical here?
    I have read some detailed analysis (World bank and other reports on Indonesian property/land development) which break down this type of thing and costs simply aren't this high (mainly related to IMB though). Whilst 15M may not be excessive to expats it represents a considerable cost to an Indonesian trying to change the usage of their land.

    Expected to pay something BUT never know how much is being pocketed by the Notary/solicitor and how much is actually going to government.

    any help would be appreciated
     
  17. DCC

    DCC Member

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    This is reactive so I may be missing something here but:

    IMHO

    It is not the zoning you need to change, it's your land use classification, ya? If it's is zoning, forget it - that's fixed.

    And there is no F'n way that changing permitted use will cost anything remotely close to 15j. Anyone who tells you differently is a thief and lier!

    Who's your notarice & lawyer?
     
  18. gilbert de jong

    gilbert de jong Active Member

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    don't wantt to be an *ss, but land use classification is automatically changed inside the contracts between the nameholder and the foreigner, and also on the certificate. If not, hell the notary ain't worth getting paid for his 'work'.
    Zoning is btw not fixed, if you meant fixed as in 'not changeable'.
    and the price jaffa mentioned for changing zoning (not usage) is pretty accurate.
    You dcc should know that zoning is not fixed and is changeable for a price, price includes paying banjar/desa, dep agraria & peternaken, survey (yes again survey)notarycosts.
    Changing usage however, is depending on the price of the land. could be 15j could be 5j but could also be 40j...


    @jaffa, 15 juta not 15m :wink: ,m is considered to be milliard instead of million.
     
  19. DCC

    DCC Member

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    From the little I know - zoning is set by the regenency/provincial gov (not community) - it's what is shown on the land use maps and it is fixed, as in established for development purposes and not subject to piecemeal revision (only ignored at will). For example - greenbelt no-build zones, go apply for a zoning change...good luck. Not saying it's impossible but If it's an actual zoning matter I would move on to greener pastures :).

    The above relates to my experience here in the south.

    I suspect the classification change is what was being discussed, and that is changed only by request whether or not the title changes hands. Yes it is a simple administrative act but fees are often charged for that service during transaction.
     
  20. gilbert de jong

    gilbert de jong Active Member

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    Your right DCC about it being set by the regency, one has to go to the Kabupaten, the department of agraria and peternakan(farming) but don't forget the little guys like the banjar...indeed alot of hassle :D , and personally I wouldn't bother with land that is 'green-zoned'...btw, the new office of kabupaten Badung is build in a green-zone, or former green-zone :wink: .

    yep, the classification or the intented use of the land, is changed by request...wich the notary makes (or should make) when the certificate changes hands to a foreigner, I am assuming here that this notary also makes the nominee contracts and therefor is aware of the intented use.
    and in that case an extra fee is b*llsh*t, some notaries ofcourse will try and play dumb and charge extra...but it should be included in the 2,5% (percentage of landprice) fee for the notary. At least it always was in my transactions.
     
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