Real estate—Indonesia—Q&A guide
Real estate—Indonesia—Q&A guide

The following Property practice note provides comprehensive and up to date legal information covering:

  • Real estate—Indonesia—Q&A guide
  • 1. How would you explain your jurisdiction’s legal system to an investor?
  • 2. Does your jurisdiction have a system for registration or recording of ownership, leasehold and security interests in real estate? Must interests be registered or recorded?
  • 3. What are the legal requirements for registration or recording conveyances, leases and real estate security interests?
  • 4. What are the requirements for non-resident entities and individuals to own or lease real estate in your jurisdiction? What other factors should a foreign investor take into account in considering an investment in your jurisdiction?
  • 5. If a non-resident invests in a property in your jurisdiction, are there exchange control issues?
  • 6. What types of liability does an owner or tenant of, or a lender on, real estate face? Is there a standard of strict liability and can there be liability to subsequent owners and tenants including foreclosing lenders? What about tort liability?
  • 7. How can owners protect themselves from liability and what types of insurance can they obtain?
  • 8. How is the governing law of a transaction involving properties in two jurisdictions chosen? What are the conflict of laws rules in your jurisdiction? Are contractual choice of law provisions enforceable?
  • 9. Which courts or other tribunals have subject-matter jurisdiction over real estate disputes? Which parties must be joined to a claim before it can proceed? What is required for out-of-jurisdiction service? Must a party be qualified to do business in your jurisdiction to enforce remedies in your jurisdiction?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to real estate in Indonesia published as part of the Lexology Getting the Deal Through series by Law Business Research (published: September 2020).

Authors: SSEK Indonesian Legal Consultants—Denny Rahmansyah ; Greita Anggraeni

1. How would you explain your jurisdiction’s legal system to an investor?

Indonesia has a civil law system, with written laws and regulations as the primary source of law. There are laws and regulations with national and regional scope. For real estate, key matters relating to land title, land registration, security and lease are generally regulated at the national level. Related aspects of real estate may be regulated at the regional level (eg, zoning and building construction requirements).

Court judgments are non-binding in nature as the principle of precedent does not apply. Courts are not obliged to follow previous rulings in similar cases. Court rulings must be based strictly on the rule of law, although customarily plaintiffs will request the judges to render their decision ex aequo et bono – to rule based on what is fair and just for the given circumstances.

In civil cases, the courts put a heavy weight on documentary evidence. The concept of parol evidence is not recognised, so if the parties to a contract wish to allow the admission of parol evidence they must do so through an express contractual provision. Contracts may

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