Land acquisition in Indonesia is not merely an economic decision but a legal act with long-term implications. It involves a complex interplay of statutory obligations, administrative procedures, and property rights. Legal disputes over land—often arising from the failure to conduct proper due diligence—are among the most common in Indonesian courts.
Based on statutory regulations and field practices, this article outlines seven key legal aspects that every prospective land buyer must verify to ensure legal certainty and avoid future disputes. These principles serve as a legal risk mitigation framework in land transactions.
- Legitimacy of Land Ownership Rights
The foremost requirement is to verify the legal status of the land. Land with a Certificate of Ownership (Sertifikat Hak Milik/SHM) provides the strongest legal protection under Article 23 of Law No. 5 of 1960 on Basic Agrarian Principles (UUPA). Land without official certification (such as girik, letter C, or village certificates) must be formalized through the National Land Agency (BPN) to ensure its lawful transfer.
- Clear and Lawful Ownership
It is essential to confirm that the seller is the rightful owner. In cases involving joint marital property or inheritance, appropriate legal documents such as marital consent or a certificate of inheritance must be provided. Articles 35–36 of Law No. 1 of 1974 on Marriage govern property relations in a marriage, requiring spousal approval for the transfer of jointly owned land.
- Consistency Between Physical and Legal Data
The physical dimensions of the land must match the records in the land certificate. If discrepancies exist, Article 19(2) of Government Regulation No. 24 of 1997 allows for re-measurement and correction. Failing to rectify differences may result in boundary disputes or overlapping claims.
- Location Legality and Spatial Planning Compliance
Buyers must inspect the location to determine if the land is within a disaster-prone zone, conservation area, or protected green space. In accordance with Law No. 26 of 2007 on Spatial Planning, any land use must align with the regional spatial plan (RTRW). Failure to comply may lead to restrictions on use or even revocation of rights.
- Execution of Sale Deed by a Land Deed Official (PPAT)
Pursuant to Article 37(1) of Government Regulation No. 24 of 1997, any transfer of land rights must be formalized through a Sale and Purchase Deed (AJB) by a licensed Land Deed Official (PPAT). The AJB is a prerequisite for title registration and legal recognition of the transaction.
- Settlement of Tax Liabilities
Every land transaction involves taxes: the seller is responsible for Income Tax (PPh) and the buyer must pay the Land and Building Rights Acquisition Duty (BPHTB). As regulated under Law No. 21 of 1997 jo. Law No. 20 of 2000, proof of tax payment is mandatory for title transfer processing.
- Title Transfer Registration at BPN
Upon completion of the sale and tax obligations, the buyer must register the change of ownership at the local Land Office (BPN). Legal ownership is not recognized until the buyer’s name is officially recorded on the land certificate.
Preventive Legal Protection and Due Diligence
In the Indonesian legal system, the principle of prudence is fundamental to any legal transaction, especially in land acquisition. Failure to comply with these procedures exposes the buyer to significant legal and financial risks. In various decisions, the Supreme Court of Indonesia has emphasized the need for complete and accurate legal documentation as the basis for asserting ownership rights.
Conclusion
Ensuring legal certainty in land purchases involves more than obtaining a certificate. It requires strict compliance with procedural and substantive legal obligations under agrarian law, land administration regulations, and spatial planning norms. Adherence to the seven principles outlined above empowers buyers with stronger legal standing and protects against future disputes.