Bali cracks down on Nominee real estate deals

 

In your own country, would you entrust the ownership of your house or apartment to someone you don't know? If not, why would you do so in a foreign country? But that's exactly what thousands of foreigners do in Bali in their eagerness to "own" a piece of Paradise despite the very real risk that such illegal 'nominee' arrangement can be revoked at any time by the Indonesian "Nominee" owner of the property.

Here is the latest press release on this subject:

The Minister of Agrarian Affairs who is also the head of the National Land Agency (BPN), Ferry Mursyidan Baldan, told Kompas.com that his office will soon survey and inventorying land “owned” by foreigners in Indonesia.

“It is absolutely not allowed for foreigner to own a single inch of land in Indonesia. This is as stipulated by the National Constitution,” said Ferryafter attending the re-launch of a magazine on zoning in Bandung on Sunday, March 8, 2014.

The Minister’s comments were also reported by the State News Agency Antara.

The survey and inventorying of land “owned” by foreigners, according to Ferry, must be done to verify that there is no land in Indonesia controlled by foreigners.

“According to international law, only the home of a foreign ambassador and the Embassy can be owned by foreigners (in Indonesia),” he said.

The Minister said there is a great deal of land in Indonesia, particularly in tourism areas such as Bali and Lombok, that it owned (illegally) by foreign nationals.

In Bali and Lombok many foreigners control land through nominee landowners, using legally questionable powers of attorneys and fictive mortgage agreements. The Minister’s statement has many in the property sector concerned that land could be confiscated by the State or documents used to establish illegitimate foreign control of land declared invalid. The latter could create a windfall for the nominee who would then be established as the sole and rightful owner of the land. Underlining added for emphasis by blogmaster

When Ferry was asked what sanctions can be imposed on foreign nationals known to illegally own land in Indonesia, the Minister replied “there is no sanction.”

“There’s no need for sanctions, we will just divert possession of the land. We will ask if he has an Indonesian wife and divert the land to her. But, if he doesn’t have an Indonesian wife, then the land will be taken by the State,” Ferry explained.

Note by blogmaster: Under no circumstances can foreigners own property under Hak Milik (Freehold) title in Indonesia. There is only one semi-exception. If a foreign investor is married to an Indonesian citizen, providing that a Pre-nuptial agreement was entered into prior to the marriage being registered, the Indonesian spouse may hold Hak Milik land title.

He assured that the coming survey and inventorying of land ownership thought to be “owned” by foreigners will be done in an orderly manner. “This will not be done in a half hazard way. We are doing surveys (in such a way) as to avoid creating an uproar. We are inventorying, not conducting raids. So there is not need for anyone worrying or being frightened."

Also read "Indonesian foreign land title “reforms”: Who’s afraid of the big, bad wolf?" and "A nightmare in paradise".

P.S. The nominee issue has caused people to think twice, though even before the government made nominee arrangements illegal an Indonesian friend who is a lawyer told me that if a case ever came to court a foreigner would never win over an Indonesian, the agrarian law being what it is. There is a way for a foreigner to buy land and have his/her name on the title deed, and that is using 'Hak Pakai'. This is valid for 25 years, is legal and is renewable after the first 25 years (provided the law hasn't changed in the meantime). This could suit people coming to Indonesia to retire as 25 years would probably be long enough to see them out.

 

Related articles:

What Part Don’t You Understand?

Regulation of Property Ownership by Foreigners

Bali Property Ownership by Foreigners

 

What Really Happens in Bali

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A more appropriate title would be “Australians acting like idiots overseas”.

Have you ever bought someone a house?

 

Neither have we but I bet we can make a difference for Boni, Titi & Ho, the three gifted, charismatic street musicians in this feature-length documentary called JALANAN which is a drama/comedy/romance/musical all rolled into one. Although they're living on the streets of Jakarta, struggling to hack out a basic living in the margins of society, they don't act like victims or grow bitter but retain their cheeky personalities, their hopeful spirit and their good hearts. They laugh more than most wealthy people I know. They celebrate life. They are an inspiration to us all!

The producer of the movie tried to think how he could improve their lives through this film. To be sure, the awareness that it generates will benefit – at least in a small way – their immediate community, and perhaps even marginalized people in other places too. A film doesn’t fix lives, but it can bring acknowledgement, which for many of these people is really all they ask.

But he still wanted to find a way of leaving them with a better life after the film than they had before it. While they will always be responsible for their fate and need to continue working hard and acting responsibly, he wanted to do his part in helping them move forward in life.

Assisting them financially seems logical, but he had learned through years of experimentation that handing them money – as in cash – never works. No matter how much you give, it’s gone two weeks later. And it’s not even their fault: as soon as they come into any sort of money, they're under intense pressure from family members, friends and neighbors to help them out. Indeed, in Indonesian culture it would be unthinkable not to.

So any money he gives them inevitably ends up helping a cousin make payments on his motorbike, a neighbor fix her roof, or a sibling buy new clothing. None of this is bad, of course, but it meant that just days after a modest financial windfall, those buskers were no better off than they were before. He found this frustrating and wanted to find some form of assistance that would be for them, and wouldn’t just disappear.

So he decided to try to buy them each a house. Something that will be theirs to keep. A place they can live or rent out or raise kids in. It won’t be large or fancy or even in a good neighborhood, because he won’t realistically be able to raise that kind of money. But Boni, Titi & Ho are humble individuals accustomed to living simply (Boni lived in a sewage tunnel for 10 years) so just owning a home, no matter how modest, will be a dream come true.

A house with a legitimate land certificate is also a much harder thing to take away from them. The certificates will be deposited with a third party so that the buskers cannot be pushed into pawning off their property no matter how intense the pressure may be from those around them. With lives that are constantly in flux, their houses should be the one non-negotiable asset that stays with them forever.

A simple one-bedroom house in a low-income neighborhood in Jakarta will cost at least $15,000 and so the overall fundraising target will be $50,000. If a thousand people each put up $50, Boni, Titi and Ho's lives will be turned around for ever!

We at "Riverbend" Cottage want to be part of this transformation and decided that for every booking we receive from now on, we will donate $50 in our guests' names to Boni, Titi and Ho's Housing Fund.

So next time somebody books themselves a holiday at "Riverbend" Cottage, they won't just have a wonderful time but also leave feeling proud and warm and fuzzy inside for having made a difference to three young people's lives. And since the donation is in their name, they will also receive a copy of the movie JALANAN when it is released on DVD.

 

Donated so far: US$50 on behalf of Michelle & James Thompson US$50 on behalf of Elaine & Mike Maffei US$50 on YOUR behalf?

 

 

P.S. Of course, they don't have to stay at "Riverbend" Cottage to make a donation. They can also directly DONATE HERE. And if they have been touched by Boni, Titi and Ho's story, we hope they will tell their friends!

The Edge of Bali

 

Three people travel to Bali for very different reasons. All three are on the edge, unsure of whether they should stay in Bali any longer, but are increasingly drawn into the heart of this complex and alluring island. One of the three travellers in the story states with contempt:

"The hotel’s farthest fence had a gate that led to the beach, and there, too, its billboard reminded you that inside it was the way you want Bali to be. And eat your heart out everyone else, because Bali isn’t the way you want it to be. Bali has dirt and poverty and armies of hustlers trying to make a dollar, and if you can’t get behind a big, wealthy wall you can’t miss it."

I have often wondered what Bali was like before it became fouled by tourism. Before plastic accumulated in refuse dumps outside of each family compound. Before, when the tropical air wasn’t filled with billowing, yellow smoke as families burned their garbage alongside the road every night.

The Edge of Bali is a classic example of a book that should never have gone out of print.

The Germans are laughing in my bloody pool bar so I won't be there this year ...

 

... but I try again next year!