Presentation on New Condominium Law in Indonesia that was issued in November 2011 By Eddy Leks, from Leks&Co. Please visit www.lekslawyer.com

1. REVIEWING IMPLICATIONS OF INDONESIA’S NEW
CONDOMINIUM LAW ON THE PROPERTY
INDUSTRY
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2. Background
• Indonesia has a new Condominium Law that is Law No 20 of 2011 on
Condominium. This law takes into consideration Article 20, Article 21, and
Article 28H paragraph (1), paragraph (2), and paragraph (4) of the Indonesian
Constitution Law 1945 as well as Law No. 1 of 2011 on the Housing and
Occupancy
• With this new law, the previous Law Number 16 of 1985 on Condominium is
revoked since it is no longer in accordance with the development of law, the
people’s needs, and the participation of the society as well as the responsibility
and the state’s obligation with regards to the condominium matters
 All the implementing regulations of the Law No. 16 of 1985 on condominium
shall remain valid as long as it is not in contrary to or has not yet been replaced
with a new implementing regulations under the new condominium law
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3. Condominium development by Foreign
Investment Company
 The development of the commercial condominium is able to be implemented by
everyone and can also be conducted through the foreign investment company in
accordance with the laws and regulations (article 41 condominium law)
 Every foreign investment in Indonesia shall take form as Limited Liability
Company which is called as a foreign investment company (Article 5 Law No. 25
of 2007 on Investment)
 The foreign investor must check the Negative Investment List in order to know the
maximum percentage that can be owned by foreigner or foreign entity in a
company for particular sector in Indonesia.
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4. Condominium development by
Foreign Investment Company
 Presidential Regulation No. 36 of 2010 on List of Business Fields Closed to
Investment and Business Fields Open, With Conditions, To Investment.
The real estate business in Indonesia is able to be
owned 100% by foreigner
Based on Standard Indonesian Business Field Classifications
number 68110. This field includes buying, selling, leasing and
operating of real estate, which is owned or leased.
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5.  A condominium is a multilevel building which is built in an
area that is divided into sections which are structured
functionally, whether horizontally or vertically that
constitutes as units in which each can be owned and used
Definition separately, mainly for residence complemented with
common equipment, common facilities and common land.
(Article 1 paragraph 1 condominium law)
Special
State
Condominiu Condominium
Condominium Owner and Tenant m
Association (PPPSRS)
• Legal entity Public
Condominium
Commercial
Condominium
• The members are the owners or the Types of
Condominiu
tenants of the condominium m
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6. Certificate of
Certificate of
building ownership
condominium
of condominium
unit (SHM
unit (SKBG
Sarusun)
sarusun)
Evidence of
ownership upon the Evidence of
land over Right of ownership upon
Ownership, Right to the building over
Build or Right of Use the state /area
over state’s land, property in the
Right to Build or form of land or
Right of Use over waqaf land
Right of through lease.
Management.
Proportiona
l • A number showing the comparison between condominium unit and
common facilities, common equipment and common land which is
Compariso calculated based on the respective condominium unit over total value of
n Value condominium by the time the developer initially calculated the total
construction costs to determine its selling price
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(NPP)

7. Certificate of Condominium Unit (SHM Sarusun)
Is an integral part which consists of:
a. Copy of book of land and measurement letter of right of common land in
accordance with the laws and regulations
b. Floor sketch picture at the level of the related condominium which shows the
owned condominium unit
c. Title of division regarding the size of the parts of rights upon the common
equipment, common facilities, and common land for the person concerned.
Can be used as a security which is encumbered by mortgage in accordance with
the laws and regulations
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8. Certificate of Building Unit Ownership (SKBG Sarusun)
Is an integral part comprising :
a. Copy of building books
b. Copy of land lease agreement
c. Floor sketch picture at the level of the related building
which shows the owned building unit
d. Title of division regarding the size of the parts of rights
upon the common equipment and common facilities
concerned.
Can be used as a security which is encumbered with fiducia
in accordance with the laws and regulations
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9. Obligation of the Commercial Condominium to Provide
Public Condominium
• The developer of the commercial condominium is required to provide a public
condominium (can be conducted outside the commercial condominium area
location in the same regency/city) with the minimum of 20% from the total
floor area of the developed commercial condominium’s floor
• Further regulation will be regulated in the Government Regulation.
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10. • Right of Ownership
Condominium can be • Right to Build or Right of
Use over state land; and
constructed over the • Right to Build or Right of
land of: Use over Right of
Management
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11. Sketch and Description
In constructing the condominium, the developer shall separate the
condominium into condominium units, common equipment,
common facilities, and common land
The separation of the condominium as set out in Further regulations are
Article 25 (1) shall be made in the form of sketch and regulated in the
description
Government Regulation
The sketch and description becomes the basis to
determine the Proportional Comparison Value (NPP),
certificate of condominium unit(SHM sarusun), or
certificate of building ownership of condominium The sketch and description is made before
unit (SKBG), and the conditional sale and purchase the construction of a condominium.
agreement (CSPA)
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12. The sketch and description are made
in the form of the deed of separation
that is legalized by the
regency/mayor Specifically for the Province of
DKI Jakarta, the separation
deed of separation is legalized
by the Governor
In implementing the
condominium’s a. Status of right
development, the of land; and
developer shall fulfill
the administrative
requirements which
b. The building
include: construction
permit (IMB)
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13. The function and Specifically for the
utilization plan has to Province of the DKI
obtain the permit from Jakarta, the function and
the regency/mayor. utilization plan has to
obtain the Governor’s
permit
After obtaining the permit, the developer shall ask the
legalization from the local government of the title of
division showing the clear boundaries of each
condominium units and also common equipment, common
facilities, and common land as well as the description of
Proportional Comparison Value (NPP)
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14. The permit application is proposed by the developer by
attaching the following documents:
• the land certificate;
• the regency/city plan information letter;
• the site plan sketch;
• the architecture sketch plan which includes drawing, look,
and the piece of the condominium which shows clearly the
boundaries vertically and horizontally of a condominium
unit;
• the structure plan sketch as well as its calculation;
• the sketch plan which shows clearly the common
equipment, common facilities, and common land and
• the sketch plan of the public utility and the installations as
well as its equipments
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15. Change Over the Function Plan and the Utilization of the
Condominium
•Obligated to have the permit from the regent/ mayor
•Specifically for the Province of DKI Jakarta, has to obtain the permit from
the Governor
•In the case of the change of the function and utilization plan of the
condominium causing the change of Proportional Comparison Value (NPP)
the title of division has to be re-legalized by the Mayor/Regent.
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16.  The developer shall apply the application of the certificate of feasible function
to the regent/mayor after finishing all or part of the condominium’s
development as along as it is not in contrary to the building construction
permit (IMB)
 Feasible Function  the functioning of all or part of a condominium that can
guarantee the fulfillment of building structure and its reliability according to
the function as set out in Building Construction Permit
 Specifically for the Province of DKI Jakarta, the application of the certificate
of feasible function is proposed to the Governor.
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17.  Developer is allowed to market the condominium before the construction is begun as long as
they meet the following requirements (Article 42 Condominium Law):
a. The certainty of the usage of land;
b. The certainty of right of land;
c. The certainty of the condominium controlling status (the certainty of condominium
controlling status needs to be provided to the buyer based on the title of division legalized
by local government)
d. The building construction permit; and
e. Guarantee over the condominium’s construction from the guarantee institution (may be in
the form of support letter from bank or non bank).
 When the marketing is performed before the construction of the condominium, everything
that has been promised by the developer and/or its marketing agent binds as the Conditional
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Sale and Purchase Agreement (CSPA) to both parties

18. Conditional Sale and Purchase Agreement (CSPA)
1. Land Ownership Status;
2. Obtain the Building Construction Permit;
3. The availability of facilities and public utilities;
CSPA is
conducted after 4. The completion of
fulfilling certain (20% of the volume of the condominium building
20% of construction;
requirements : construction that are being marketed)
and
(the condition of condominium unit that is built and sold to
the costumers, including through promotional media, inter
5. The provisions alia, condominium location, type of condominium,
agreed
building specification, condominium price, facilities, public
utilities, and hand over date of condominium unit)
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19. Conditional Sale and
Purchase Agreement (CSPA)
Technical Guideline for CSPA
Decision of State Minister for Public Housing
No.11/KPTS/1994 on Technical Guidelines of Conditional
Sale and Purchase Agreement
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20. Conditional Sale and
Purchase Agreement (CSPA)
Material issues in CSPA
CSPA regulates the following, among others:
 The objects of sale and purchase is the right of ownership over condominium unit
which covers common facilities, common equipment and common land according
to the Proportional Comparison Value of the respective condominium unit. The
condominium must have required licenses such as location permit, proof of control
and payment of land and Building Construction Permit.
 Management of the condominium which stipulates that the buyer should be willing
to be the member of Condominium Owner and Tenant Association in order to
manage the common facilities, common equipment and common land also the
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amount of service charge that will be agreed amicably.

21.  Developer’s obligation are:
1. Before conducting initial marketing, developer shall report to the
Regent/Mayor copied to the Minister of Public Housing. The report shall
comprise:
o Copy of principle license;
o Copy of decision of granting of location permit;
o Evidence of procurement and payment of land;
o Copy of Building Construction Permit
o Title of Division legalized by the Local Government;
If, within 30 days after the receipt of submission of report, there is no
response from the Local Government, the initial marketing may be
conducted.
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22. CSPA - Cont’d
2. Provide documents of development such as:
 the land certificate;
 the site plan sketch;
 the architecture sketch plan which includes drawing, look, and the piece
of the condominium which shows clearly the boundaries vertically and
horizontally of a condominium unit;
 the structure plan sketch as well as its calculation;
 the sketch plan which shows clearly the common equipment, common
facilities, and common land; and
 the sketch plan of the public utility and the installations as well as its
equipment.
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23. 3. Complete the construction according to the agreed standard;
4. Repair any damages within 100 days after signing the minutes of
delivery of condominium unit from the developer to the buyer,
with the conditions:
 Developer’s responsibility is limited to the design and the specifications
of condominium unit;
 The damages that occurred are not due to buyer’s fault.
5. Responsible to the hidden damages which may be discovered later on
6. Become a temporary manager before the Condominium Owner and
Tenant Association is established
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24. CSPA - Cont’d
7. Insure the building construction during the development
8. If during the construction force majeure takes place beyond the ability of
both parties, then Developer and buyer would consider amicable
settlement with the priority to complete the construction of condominium.
9. Prepare the Sale and Purchase Deed then together with buyer sign the
deed before the Land Conveyancing Officer on the stipulated date. Then
the developer and/or the appointed Land Conveyancing Officer will
manage so that the buyer will obtain the certificate of right of ownership
over condominium unit under the name of the buyer and the buyer will
bear its costs.
10. Deliver the condominium unit including the public facility and social
facility perfectly on the stipulated date and if the construction has not
finished yet, the developer has a chance to complete the construction
within 120 days, counted since the planned delivery date.
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25. CSPA - Cont’d
11. If the construction is not completed after 120 days then the CSPA
shall be null and void and its nullification may not be proven or
requested through a court decision or arbitration body, and for the
developer, it is obligated to refund all the payment which has been
received from the buyer plus penalty and monthly interest in
accordance with the prevailing bank rate.
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26.  Buyer’s Obligations are:
 Stating that the buyer has read, understood and accepted the entire terms and
conditions on purchase order and CSPA. Buyer will subject to the terms and
conditions in the Article of Association of Condominium Owner and Tenant
Association and any related documents, and the conditions of the agreements and
documents will bind the buyer .
 Buyer of condominium unit shall pay management fee and utility expenses and if
the payment is late, the buyer will be penalized as stipulated by the Association of
Condominium Owner and Tenant Association
 The responsibility of buyer covers:
• Payment of the required deeds
• Service fees of Land Conveyancing Officer for a deed of sale and purchase of
condominium unit
• Costs to obtain Right of Ownership over condominium unit, registration costs
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(change of name) in Land Office

27.  After the deed of sale and purchase is signed but before the certificate of right
of ownership over condominium unit is issued by the National Land Agent:
If the condominium unit is transferred to third party, it will be charged
administrative fees as stipulated by the developer, which cannot be more
than 1% from the selling price
If the condominium unit is transferred to family member for whatsoever
reason, including inheritance by law, it will be charged administrative fees
for Notary/PPAT according to the prevailing rate.
 Before the selling price of condominium unit is fully paid, the buyer is not able
to transfer or encumber the condominium unit as debt security without prior
approval in writing by the developer.
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28.  Dispute settlement on the CSPA is conducted through arbitration in accordance
with the rules of BANI (Indonesian National Board of Arbitration) where the
parties will bear the costs equally.
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29. Certificate of Certificate of
Feasible Building Unit
Function Ownership /
Certificate of
Condominium
Unit
After the
issuance of:
Article 44 condominium
law
The development of the condominium is stated as
completed
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30. The Utilization of the Condominium
Utilization of • Residential or
condominium:
• Mix-use
Mix-use means a mix between residence function and non-residence function
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31. Pengelolaan Rusun
Management of condominium covers the Management agency of condominium has
operational activity, maintenance and to be in a form of legal entity except
treatment of the common equipment, commercial lease condominium, special
common facilities, and common land condominium, and state condominium
The Management of
Condominium
Management has a right to receive The Management has to register & obtain
amount of management fee that is the business permit from: regency/ mayor.
charged to the owner and the tenant For DKI Jakarta, has to obtain it from the
proportionally. Governor
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32. The Management of Condominium Cont.
can cooperate with the Manager
 Developer, during the transition period shall manage condominium prior to
establishment of Condominium Owner and Tenant Association (PPPSRS)
- The transition period is determined for as long as 1 year since the first handover
of the condominium unit to the owner
-the amount of the condominium management cost during the transition period is
covered by the developer and the owner of the condominium unit based on the
Proportional Comparison Value (NPP) of each condominium unit
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33. Condominium Owner and Tenant Association (PPPSRS)
 Developer shall facilitate the establishment of PPPSRS before the
end of transitional period.
 The PPPSRS is given a position as legal entity by law.
 The owner of the condominium unit shall establish PPPSRS
 PPPSRS consists of the owner or tenant who obtains the proxy
from the owner of the condominium unit
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34. Condominium – Cont’d
 In the event PPPSRS has already been formed, the developer
shall immediately hand over the management over common
equipment, common facilities, and common land to the PPPSRS
 PPPSRS may form or appoint a building manager
 The procedure to manage the interest of the relevant owner and
tenant is regulated in the Articles of Association and By-Laws of
PPPSRS
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35. Condominium – Cont’d
 In terms of making decision concerning ownership or management of condominium,
every member has equal right based on the Proportional Comparison Value (NPP)
 In terms of making decision concerning the interest of condominium occupancy,
everyone has the right to give one vote. This means if the condominium unit has been
occupied, the vote of owner may be granted to the occupant of the unit. If the unit has
not yet been occupied then every owner only has the right of one vote. Although one
person owns more than one units, he/she can only give one vote.
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36. Condominium – Cont’d
Right to Vote of member of Condominium Owner and Tenant Association
• Voting Right of Occupancy
A voting right to determine housing rules, utilization of common facility and
obligation to pay service charge over management and fire insurance of common
rights such as the management of common equipment, common facilities and
common land
• Voting Right of Management
A voting right to determine maintenance, repair and construction of
environment infrastructure, social facility, common equipment, common facility and
common land.
• Voting Right of Ownership
A voting right to determine matters concerning the relationship between tenants
of condominium unit, election of administrator and costs of condominium unit.
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37. Condominium – Cont’d
Decree of Ministry of Public Housing No.
06/KPTS/BKP4N/1995 On Guideline of Deed
of Establishment, Articles of Association and
Articles of Condominium Tenant Association.
Regulates the establishment of Condominium
Owner and Tenant Association
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38. Condominium – Cont’d
Establishment Meeting:
• Every owner and/or tenants of the condominium unit, firstly conduct the
meeting of establishment of Condominium Owner and Tenant Association
and its result will be made in form of Minutes of Meeting;
• In the meeting it is necessary to designate some candidates/ member of
the meeting which will be given proxy to come to Notary to make
statements of the results of the meeting
• In the meeting, without reducing any permission from the officials, it is
stipulated the Article of Association of Condominium Owner and Tenant
Association.
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39. Criminal Sanctions
Convicted of
maximum 2 (two) • A developer of the commercial condominium
who breaches his obligation to provide public
years imprisonment condominium at least 20 % of total floor area of
or maximum fine of commercial condominium construction
20 billion Rupiah
• A Developer who made a CSPA that is not in
Convicted of accordance with the one that is marketed
maximum 4 years • A developer who did not fulfill the certainty of:
• Land ownership status
imprisonment or • Building Construction Permit
maximum fine of 4 • Availability of facilities, infrastructure, public utility
billion Rupiah • Volume construction minimum 20%
• Subjects in the agreement
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40. Criminal Sanctions
• Everyone who damages or changes the infrastructures,
facilities, and public utilities in the condominium
Convicted of maximum 1 environment; conduct actions which endanger others or
year imprisonment or public interest in the condominium environment; change
maximum fine of 50 the function and utilization of the condominium unit; or
million Rupiah convert the function of the infrastructures, facilities, and
public utilities, as well as common equipment, common
facilities, and common lands in the construction or the
management of the condominium.
• Everyone who changes the function of the determined
Convicted of maximum 2 years
imprisonment or maximum fine of 50 condominium location; or
million Rupiah • Change the function and the utilization of the
condominium
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41. Criminal Conduct Performed by a Legal Entity
 Besides criminal sanctions and fine to its directors, criminal provision can be
imposed to a legal entity in the form of three times the fine for a person
(Article 117 Condominium Law)
 Additional criminal sanctions can be imposed to the legal entity in the form of:
Revocation of Business License
Revocation of Legal Entity Status
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42. Leks&Co
Jakarta
Menara Palma 17 Floor, Suite17-02B
Jl. HR. Rasuna Said Blok X2 Kav.6
Kuningan, Jakarta 12950, Indonesia
T:+62 21 5795 7550
F:+62 21 5795 7551
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