Maybe This Will Help Someone.

[Rellek]

I live in West Bali in an enclave of retirees. I was offered to purchase a Villa here after meeting with several owners here and it seemed like a great investment and place to live. I signed a contract (99 year lease) and paid the price for the Villa and moved in about 3 years ago. Everything was great. The property owner then put the property up for sale (we found out about the sale listing ourselves). Important to note the property owner lives in New Zealand and is married; an Indonesian wife. It turns out the owner of the property owns the land (through marriage) but does not have a hotel license or even building licenses for the several apartments and Villas on the land.So essentially, the "owners" here could be moved out at any time after the sale of the land. We have hired a Bali Lawyer but our only option may be to purchase the land ourselves.

I feel pretty stupid for getting involved with this apparent scam but that's what happens..You visit a place, the locals living here are wonderful, you have an agent say "you too can live here" you sign a contract, pay the fees and then BOOM!

I should have hired a local lawyer to review the contract. I should not have relied on word of mouth about joining a wonderful group of ex pats living the dream on Bali.

Maybe this will help someone.

 

[harryopal]

It is a failing of most of us that we tend to naturally trust people. A slim possibility might be to know where the owner lives in New Zealand and then contact as many news organizations, press, tv radio as you can with your story. Ideally some kind of investigative program. A spotlight of publicity might embarrass the owner into a statement of "misunderstanding." Given your investment, it would be worth your while to go to New Zealand if you get an interest from media.

An awful predicament and good of you to post your story here as a cautionary tale.

 

[harryopal]

There may be some who will read your story, shrug and say, "due diligence." But these kind of horror stories are not confined to Indonesia. After reading your post I found this story on the ABC web site.

Most of the buildings on Janet's new property are illegal. She says she didn't know

It's the biggest investment most people make, but in the "buyer beware" market, what you see is not always what you get, as these people found out.

www.abc.net.au

 

[sakumabali]

Hi Rellek, where do you live in West Bali? not asking for the villa location just the village...I lived in the west as well

 

[meremortal]

I live in West Bali in an enclave of retirees. I was offered to purchase a Villa here after meeting with several owners here and it seemed like a great investment and place to live. I signed a contract (99 year lease) and paid the price for the Villa and moved in about 3 years ago. Everything was great. The property owner then put the property up for sale (we found out about the sale listing ourselves). Important to note the property owner lives in New Zealand and is married; an Indonesian wife. It turns out the owner of the property owns the land (through marriage) but does not have a hotel license or even building licenses for the several apartments and Villas on the land.So essentially, the "owners" here could be moved out at any time after the sale of the land. We have hired a Bali Lawyer but our only option may be to purchase the land ourselves.

I feel pretty stupid for getting involved with this apparent scam but that's what happens..You visit a place, the locals living here are wonderful, you have an agent say "you too can live here" you sign a contract, pay the fees and then BOOM!

I should have hired a local lawyer to review the contract. I should not have relied on word of mouth about joining a wonderful group of ex pats living the dream on Bali.

Maybe this will help someone.

yes, i've heard lots of stories. i'm lucky i have a great friend and, once, business partner who i have my property name in (hak milik). we've been best buddies for over 20 years so lucky to have elisa (thank you holisa!). however, after signing a contract recently with a jehovah witness builder (who is associated with someone i know in australia) my project has hardly been finished and is no where near the $30k amount of work/materials paid for the job. putut has admitted, after my enquiring, as to what Jehovah would think of him stealing the money, that he was wrong to take my money (catu kreasi utama went bankrupt before jeremiah purniawan accepted my building project!) and pay his staff! sad state of affairs but there is a thin thread of hope that he may complete but unsure of the standard of work. this will be the subject of my next thread/question. i've also bought land in nusa lembongan in the early 2000s and wouldn't have a clue who owns it now . Or where my bit is!

 

[Markit]

I live in West Bali in an enclave of retirees. I was offered to purchase a Villa here after meeting with several owners here and it seemed like a great investment and place to live. I signed a contract (99 year lease) and paid the price for the Villa and moved in about 3 years ago. Everything was great. The property owner then put the property up for sale (we found out about the sale listing ourselves). Important to note the property owner lives in New Zealand and is married; an Indonesian wife. It turns out the owner of the property owns the land (through marriage) but does not have a hotel license or even building licenses for the several apartments and Villas on the land.So essentially, the "owners" here could be moved out at any time after the sale of the land. We have hired a Bali Lawyer but our only option may be to purchase the land ourselves.

I feel pretty stupid for getting involved with this apparent scam but that's what happens..You visit a place, the locals living here are wonderful, you have an agent say "you too can live here" you sign a contract, pay the fees and then BOOM!

I should have hired a local lawyer to review the contract. I should not have relied on word of mouth about joining a wonderful group of ex pats living the dream on Bali.

Maybe this will help someone.

I don't understand? You have a leasehold on your villa (Hak Pakai) for 99 years with a written contract. How does the sale of the property adversely affect your legal right to the property? The most the new owner can do to take possession of "his" property is to buy you out. If he doesn't do that you have the legal right to stay for the remaining 99 years. You might have to file a case (or threaten to do so) against the Notary for breach of duty that drew up your contract but you should be able to continue on with your possession - IBM (building permission) can and often are gotten retrospectively
What am I not understanding?

 

[Rellek]

I don't understand? You have a leasehold on your villa (Hak Pakai) for 99 years with a written contract. How does the sale of the property adversely affect your legal right to the property? The most the new owner can do to take possession of "his" property is to buy you out. If he doesn't do that you have the legal right to stay for the remaining 99 years. You might have to file a case (or threaten to do so) against the Notary for breach of duty that drew up your contract but you should be able to continue on with your possession - IBM (building permission) can and often are gotten retrospectively
What am I not understanding?

The expats living here had a Zoom meeting just last night to discuss this and our lawyer was also in the meeting. The lawyer speaks fluent bahasa and knows his way round the legal system here on Bali (He lives here as well). He explained, the owner of the land is a New Zealander who has the property rights in his Indonesian wife's name. All contracts are internal and even the Ownership Certificates were internally created. Apparently, the property rights do not include construction of buildings, villas and apartments and restaurant, nor does it include a license to operate a hotel/resort here on the land (somehow he got away with this). In the government's eyes, the land is vacant. My question to the lawyer was that any due diligence by any prospective buyer would include a visit to the property and see the buildings..the lawyer answered, maybe yes, maybe no. The property may be appealing to someone who sees added value in the buildings

He also explained that a 99 year lease does not exist on Bali; only 25 and 30 year leases. Personally, I believe it could take 10 years to sell the property or it could happen in six months...given the legal issues, none of us can sell our investment property here until change of ownership occurs and then our homes may be used for rentals for the new owners..

This place has been around for 30 years also adding to the problem as legality of property probably was not clearly defined then as it might be today. What you're saying in your quote makes total sense to me and maybe that's how it will turn out.

The guy who's the "owner" of the property is a real piece of shit though.

 

[britoo]

The expats living here had a Zoom meeting just last night to discuss this and our lawyer was also in the meeting. The lawyer speaks fluent bahasa and knows his way round the legal system here on Bali (He lives here as well). He explained, the owner of the land is a New Zealander who has the property rights in his Indonesian wife's name. All contracts are internal and even the Ownership Certificate was internally created. The property rights do not include construction of buildings, villas and apartments and restaurant, nor does it include a license to operate a hotel/resort here on the land. In the government's eyes, the land is vacant. My question to the lawyer was that any due diligence by any prospective buyer would include a visit to the property and see the buildings..the lawyer answered, maybe yes, maybe no. He also explained that a 99 year lease does not exist on Bali; only 25 and 30 year leases. I believe it could take 10 years to sell the property or it could happen in six months...given the legal issues, none of us can sell our investment property here until change of ownership occurs and then our homes may be used for rentals for the new owners..

This place has been around for 30 years also adding to the problem as legality of property probably was not clearly defined then as it might be today. What you're saying in your quote makes total sense to me and maybe that's how it will turn out.

The guy who's the "owner" of the property is a real piece of shit though.

Not a lawyer anywhere and certainly not a lawyer in Bali but have seen some stuff going on so this might help but does not constitute advice.

Have seen a similar situation to a degree resolved to an extent. In that case a villa was rented by a local to a foreigner (short 1-2 year Hak Sewa) immediately after which the owner marketed and sold the property he had just rented. In this case the Indonesian agent who arranged the rental took the matter to the police for arbitration with the result that the seller was obliged to offer him an equivalent property. This is arguably a win for the seller as he sold a place he had rented and rented out a vacant place he had available .... but is arguably better than the alternative.

Depending on the standing of the owner's family and connections this might be worth considering.

Markit, I don't think this can be Hak Pakai as Hak Pakai is a fixed term of 80 up from 70 years consisting of 30/30/20 up from 25/25/20 if I remember correctly, hence I think this is actually Hak Sewa - a private contract rental agreement between the parties. Rellek, you should at the very least confirm what is the legal basis of your contract and what rights it is actually granting you - land, property etc.

Note if your contract is not written in Indonesian and signed over those little stamps its void in any case.

So based on the above, you may have been leased use of a property (not land) under Hak Sewa, not land rights ie Hak Pakai and it turns out the property may be an illegal structure operated unlicensed so the obvious conclusion is that a potential buyer may simply walk away from any pre-existing contractual obligations to existing lessees on the grounds there are no legal dwellings on the land to be leased in the first place.

I wasn't aware of any limitation of 25/30 years on private contracts - Hak Sewa, unlike HP and HGB, as its a private contract and the parties can agree what they like as long as it doesn't contradict civil, criminal or constitutional law. I can see and argument as to why you shouldn't lease HP or HGB owned land for longer than your guaranteed initial renewable term ie 30 but if it's Hak Milik, a perpetuity, then there should be no obvious legal impediment to 99 - it's just more lucrative to say its capped at 30 based on HP / HGB. Don't pick a fight on this though - as logic doesn't rule and I am not a lawyer.

I wonder if whats going on here is prompted by the governor recently announcing he will clamp down on illegally operated leading rental businesses catering to foreigners.

(https://thebalisun.com/officials-co...y-stay-at-specific-hotels-and-villas-in-bali/)

Who is operating the 'business', you collectively or the land owner as this may be a route?

Do you know what price the property is being listed for - buying it out maybe the easier option?

Good luck and sorry to hear of your circumstances

 

[Markit]

The expats living here had a Zoom meeting just last night to discuss this and our lawyer was also in the meeting. The lawyer speaks fluent bahasa Ive heard lots of people say the same. It only means he speaks better than you. and knows his way round the legal system here on Bali (He lives here as well). He explained, the owner of the land is a New Zealander also not possible who has the property rights in his Indonesian wife's name meet the real owner Hak Pakai? . All contracts are internal and even the Ownership Certificates were internally created What does this actually mean? . Apparently, the property rights do not include construction of buildings, villas and apartments and restaurant,They never do, you simply have the right to use the land how you want - plant coconut trees, built villas or open anything you want WITH THE CORRECT LICENSES!!! nor does it include a license to operate a hotel/resort here on the land (somehow he got away with this) He/she's not operating a hotel, they are selling houses (requires and IMB or the new version of that) or renting out villas/rooms (Needs a Podnok Wisata and is restricted to 5 rooms tops. In the government's eyes, the land is vacant. My question to the lawyer was that any due diligence by any prospective buyer would include a visit to the property and see the buildings..the lawyer answered, maybe yes, maybe no. What, pray tell, does this have to do with the subject on hand or anything else? The property may be appealing to someone who sees added value in the buildings

He also explained that a 99 year lease does not exist on Bali; only 25 and 30 year leases. Personally, I believe it could take 10 years to sell the property or it could happen in six months...given the legal issues, none of us can sell our investment property here until change of ownership occurs and then our homes may be used for rentals for the new owners..In the mean time I've heard so many different versions of the length of time allowed under a leasehold agreement (Hak Pakai) I bow to what ever you say.

This place has been around for 30 years also adding to the problem as legality of property probably was not clearly defined then as it might be today. What you're saying in your quote makes total sense to me and maybe that's how it will turn out. You aren't by any chance somewhere in Jasri by Amlapura are you? I know of a similar set of properties, locally known as the Dutch Village, full of small bungelows where the ownership has been in contention for the last 35 years I think?

The guy who's the "owner" of the property is a real piece of shit though. Why should you care if you have a valid contract?

If I was you I'd get me someone I trust that speaks (really!) excellent Indonesian and book some time with a local (to your property) Notary that is recommended and walk him through the whole issue. I'd start off by asking for his sheet of charges and agree what his consultancy fee is in advance with the option to have him rewrite it. Don't take any nonsense about the fees listed they are only a guide and not binding so bargain.