Land Ownership

S23072019

New Member
Jun 21, 2019
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Hello all,

I have just joined up and hoping to get your opinion on land ownership.

I am a Brit married to an Indonesian woman for 20 years who is also British now. We stay in a house in Bali which is built on our families land so they own it.

If we wanted to get a proper lease in our name how do we go about arranging it? And which "Hak" is the best for someone visiting every one to two years and not a resident?

Any advice please?
 
Last edited:

spicyayam

Well-Known Member
Jan 12, 2009
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There are a few things to consider and kind of hard to advise without knowing the full situation. Does your land have its own certificate or is it part of a larger parcel?

Since your wife is no longer Indonesian, Hak Milik is not an option. Since you don't live here permanently then Hak Pakai is probably not an option.

So the options you have are rental or loan agreement. It would depend of course on what types of risks you are trying to mitigate. For example, if you are worried your property gets sold while you are away a loan agreement (Hak Tanggungan ) could be best.
 

S23072019

New Member
Jun 21, 2019
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Thank you spicyayam, the land belongs to my Father in law which has been divided between my wife's brothers. I believe it is all still under my fil's name. They all agreed to build a small house on part of the land for when we come and visit.

The whole family are very friendly and everyone gets on well. Just wondering what our options are just in case the situation changes in the years to come.

We were also wondering how to rent it out when we are not there so our family could make some money from it.

I will check out the Hak Tanggungan.

Thanks
 

spicyayam

Well-Known Member
Jan 12, 2009
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It is a good idea to think about this as you are doing and now is the time to sort it out when everyone in the family is getting along. There is always at least one person in a family who runs into money trouble or has a spouse who has different ideas as to how the inheritance should be split. I think the first step is getting your own certificate for your piece of land, with of course public access. Then you sort out how you want to rent it from your FIL.
 

S23072019

New Member
Jun 21, 2019
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I have just heard that my father in law has sorted it all out himself last week. He has divided the land between his sons and made certificates for them, and made a certicate for us stating that we own the property on the land and the land can not be sold without our certificate, which does sound like the Hak Tanggungan agreement you said in your first reply. It is nice to know we have some rights on the property.

Just getting to ready to go now. Be there in two weeks.
 

Markit

Well-Known Member
Sep 3, 2007
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Karangasem, Bali
Something to consider if your wife now has a brit passport: Britain accepts dual nationality without problem. Indonesia demands that their citizens only have the one - Indo or Brit. Unless she's renounced her Indo citizenship she may still have that so coming over the border with her Indo pass might be "exciting" - my main point is that you should check if the brits will allow her to renounce her brit passport in Indonesia but still keep it in the UK. Some have done that and the brits tend to be very understanding when you explain the situation. Obviously this would allow your wife to maintain her Indo (and British) citizenship and hence solve the land ownership difficulties. With the family you're on your own!
 

britoo

Active Member
Sep 11, 2018
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Hi S23072019,


I hope all is sorted but I am not certain that it is based on the limited information in your last post. I think your case is complicated enough to warrant you getting some professional guidance particular to your circumstances. I would really suggest that you give up some of your valuable holiday time to drop in and speak to a notary (or two, maybe even 3) whilst you are in Bali. Why so many? The adage goes ask 2 notaries the same question and expect to get 3 different answers.

I suspect it all hinges on the last poster's point, the million dollar question which is - has your wife maintained her Indonesian citizenship or has she renounced it? Even if she hasnt, what are the chances that some jealous tyke will report her for some perceived slight in the future.

From the sound of your last post your FIL has divided up the single deed for his land and assigned individual deeds (certificates) for each parcel of land and distributed them to the kids. This likely means your wife's name would be on the certificate relating to your land and this would probably be Hak Milik (freehold title). It would not be legal for you to be named on it as you are not an Indonesian citizen and are thus not eligible to own land. Actually, I think your name could be on it, but only for a limited amount of time (see below).

If your wife has maintained her Indonesian citizenship you are nearly out of the woods as she is eligible to own the land freehold / Hak Milik in her own name - subject to one slight wrinkle that you may need to sort out. The wrinkle is that under Indonesian law, married couples own their assets equally, therefor her marriage to you (johnny foreigner) means that you are an equal owner of the Indonesian land in the eyes of the law and this violates the Indonesian constitution. Hence, I understand it normally requires that the married couple have a pre- or post-nup put in place setting out that the land asset is owned entirely by the Indonesian in the couple and not jointly as the law presumes. This may or may not of course also depend on whether your marriage is formally registered / recognized in Indonesia and possibly on your residency, I don't know to be honest.

If your wife is no longer an Indonesian citizen, then you have a bigger problem to contend with as it means that she can not legally hold on to the freehold (HM) title. I say cannot hold on to it, as it appears that the law allows non-Indonesian citizens to acquire land that is gifted or inherited but subjects them to the condition that they have one (1) year in which to formally normalise the ownership status. Hence you and or your wife could be named on the gifted freehold deeds - Hak Milik certificate - even if you are both not Indonesian citizens. However, after a year if you havent legalised ownership, your now illegally owned land could in theory be seized by the Goverment.

If neither of you is an Indonesian citizen and you cannot legally own the land freehold (Hak Milik) then you may have to find an eligible legal owner for your land or refuse the gift and consider one of the other Haks,

You have said you are not resident and you do not intend to become resident so that rules out Hak Pakai (HP). HP is an odd duck, it looks like a lease but it walks like a freehold. That is its limited term ownership, like a lease, but it is transacted like a property sale, with the "seller" surrendering his deeds to the government for the duration of the HP and the buyer effectively receiving ownership rights for the period. In any case, not an option here.

Then there's Hak Sewa (HS) which literally is a lease, a private legal contract between the legal owner who remains the legal owner and the lessee who gains a right of abode for a fixed period of time. In the event that you cant hold HM or HP, then this is probably the least worst solution.

Hak Tanggungan (HT) mentioned in an earlier post is something entirely different altogether and does not provide you with any legal right of abode nor any right of ownership. It is a right of encumbrance that lets you place a legal charge on the land certificate typically against a loan made by you to the land owner. Think of this as what a bank does when it gives you a mortgage. It allows you to encumber and to keep the physical land certificate and to repossess the land only in order to recover a delinquent unpaid debt. It is a powerful thing to have as it prevents the legal land owner, whose name is on the certificate, from simply selling the land out from under you without your knowledge. Note it doesn't stop him/her from selling it. It means the sale needs to be reported to you so that your loan to him/her can be settled before the sale progresses. If however there is no real loan then then the land owner can sell the property and repay the loan of 0$. Even with a real loan it is probable that the property price will rise above the loan value making it profitable for the land owner to sell, repay you and pocket the profit. Look at this as an early warning system when used in conjunction with HS for instance.

Finally I will mention Hak Guna Bangunan (HGB) as this is the latest fad it seems though Ill caution caveat emptor. This involves setting up a foreign owned company to own the property title under HGB which you in effect own via your ownership of the company. I will say no more.

Basically, confirming if your wife is still an Indonesian citizen and how fragile this is, seems to be the priority as this is pivotal. Probably worth doing quickly as the last thing you want to have happen is you are gifted the land HM as seems to have already happened and forced to sell it back to friends or family only to lease it from them in order to become legally compliant thereby triggering a nasty legal & tax bill.

I really am going to stop now-ish but I will first recommend that you google "IMB Bali" and "Pondok Wisata" for these may well be your next challenges. Also the locals will think you quite mad for wasting even a minute of your time on these odd notions. They are of course right until of course it goes wrong and you need to reach for the paperwork.

Good luck, hope this helps, please seek sound legal advice. I am not an expert in this area, I have just relayed what I have learned, heard and read as I have investigated this topic. I may be wrong.
 
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S23072019

New Member
Jun 21, 2019
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Hello Britoo,

Thank you for the information. I am not sure which hak we have at the moment. I think it is HT. We will find out in a couple of weeks. The HGB sounds a good option but the HT sounds good for now because if we need to be notified first about the sale we can get other family members to persuade them otherwise if it ever came to that.

Markit,
We did ask about dual citizenship in the UK about twenty years ago but we were told we weren't allowed to do it. If it were possible here I wouldn't mind having dual nationalities myself. I just spent £200 on social visas so it would save a lot on visas.

Thanks
 

Markit

Well-Known Member
Sep 3, 2007
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Karangasem, Bali
Hello Britoo,

Markit,
We did ask about dual citizenship in the UK about twenty years ago but we were told we weren't allowed to do it. If it were possible here I wouldn't mind having dual nationalities myself. I just spent £200 on social visas so it would save a lot on visas.

Thanks

Ahhh, I'm not sure we're talking the same language.

What I meant to say:
  1. You and your wife now have UK citizenship/passports.
  2. Your wife is Indonesian
  3. If you approach the authorities in the UK and ask nicely if she/you may IN INDONESIA give up UK citizenship (for purposes....) and RETAIN it in the uk I'm assured if you ask nicely they may be amenable.

Same has been done for most European citizens.
 

S23072019

New Member
Jun 21, 2019
5
1
0
Ahhh, I'm not sure we're talking the same language.

What I meant to say:
  1. You and your wife now have UK citizenship/passports.
  2. Your wife is Indonesian
  3. If you approach the authorities in the UK and ask nicely if she/you may IN INDONESIA give up UK citizenship (for purposes....) and RETAIN it in the uk I'm assured if you ask nicely they may be amenable.
Same has been done for most European citizens.

We did want to do that from the start but it wasn't possible back then, or we just spoke to the wrong person at the time.
Will look into later.
 
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