Transaction for a Real Estate Property in Indonesia is a Unique Experience
For most of us, buying a property may seem like a daunting process. For starters, it is to study the location, criteria and pricing of the property. The first part is comparing and asking people for opinions about buying a property. Next, comes the due diligence of the property we want to buy. What’s more, if you plan to buy a real estate property in a different country than your own, the headache adds up. Buying Indonesia property may take you by surprise as there are conditions to the deal that is unique to the country.
Adhering to Laws
Buying a real estate property is no walk in the park. No matter where in the world you are now if you plan to purchase a real estate in a particular country, the process is no less stressful. For example, in some states, a real estate purchase will have to adhere to tax law, property law, family law, inheritance law and many more. In Indonesia, there is the Agrarian Law. The Agrarian Law is the foundation for national land law. It states that a transaction of sales and purchase of a property serves as proof of title transfer from the seller to the buyer. The transaction must be transparent, and the amount is paid in full. The law also insists that an authorised officer must supervise the purchase.
Studying From A to Z
Before any property purchase, the buyer must conduct correct due diligence to gather necessary information. Proper due diligence will also limit unnecessary details related to the property. But in Indonesia, even the tiniest detail of the real estate can become a dispute later on. Hence, it is essential to study, analyse and comprehend everything there is to know about the property. Due diligence for a property purchase includes validating land licenses, legal property ownership, reviewing agreements, verify seller’s information, tax payment, zoning, spatial layout and land map.
Verify and Prepare
If you are buying from an Indonesia company, you would need to check and verify its articles of association, and other corporate documents. If the seller is an individual, it is crucial to know whether the seller has a spouse. This may be surprising to you, but the law states that the seller’s spouse has the right to object transaction, leading to failure of selling. A married couple without a prenuptial agreement must have the spouse signing the sales and purchase agreement to legalise the deal. Other information that a buyer must get from the seller is a copy of KTP (Kartu Tanda Penduduk) together with the spouse’s KTP, Family card KK, certificate of marriage, original land ownership certificate, PBB tax payment and taxpayer identification number. As a buyer, you need to prepare a copy of KTP, your spouse’s KTP if any, Family card KK with the Residency Registration Number, marriage certificate and taxpayer identification number.
The Sale and Purchase Agreement
Now that both parties have agreed to a transaction, it is time to sign the sale and purchase agreement (SPA). The SPA is the binding agreement for both parties, and it must be done in the presence of authorised representative, seller and buyer together with their spouses. If the seller or buyer already has a postnuptial or prenuptial agreement, the spouse does not need to be present for the signing of the SPA.