Opinion on Security Paper of Land Purchasing

1. General Preview

Governing law, land ownership and rights are governed by Law No. 5 of 1960 concerning Basic Agrarian Law. Only Indonesian may hold full right to land, air and water (Art.9(1) of Law No. 5 of 1960). Law No. 5 of 1960 specifically in corporate principle Adat Law which are generally unwritten, vary across Indonesia and produce legal uncertainty. Foreigner, including former Indonesia citizen, who inherit or otherwise obtain transfers trough marriage of right ownership must release right within 1 year or revert to State. Also right of ownership can be object of mortgage.

The unique in Bali, we have very interesting atmosphere and circumstances regards on tourism industry and purposes that one of the trigger for foreigner to have property in Bali. It must be mutual understanding and do not harm any of the parties to conduct this situation (in legal term is agreement).

In legal and law perspective, foreigner shall have the ownership in authorized Indonesian to have the ownership and once in the same time releasing the ownership itself in mortgage with no exception, and must be done by legal professional advocate and notary (and land conveyer).

2. Fundamental of Agreement

Having valid and right agreement and can bound the parties, we have to fulfilled the conditions and requirements based on Private Law (Burgerlijk Wetboek), book number two, that stipulated Art. 1320, 1338 and 1339; in general 1. Agreement reached, 2. Authority to conduct, 3. The specific purposes, and 4. Condition legally accepted. Other condition must be considered and fulfilled; 1. Good faith, 2. In accordance with custom, 3. in accordance with propriety, and 4. In accordance with public interest.