INDONESIA Law and Practice Contributed by: Yogi Sudrajat Marsono, Heru Pamungkas, Agnes Maria Wardhana and Andin Aditya Rahman, Assegaf Hamzah & Partners
2.2 Laws Applicable to Transfer of Title Transfer of land title is regulated under the Land Regulations. Additional approval may be required for the transfer of certain land titles, as follows. • Transfer of land titles in an industrial estate will require approval from the estate manager. • Transfer of land titles above HPL will require approval from the holder of the HPL, which is typically regulated in a land utilisation/man - agement agreement between the HPL title holder and the title holder above such HPL. 2.3 Effecting Lawful and Proper Transfer of Title The transfer of land title is documented in a deed of land transfer or akta jual beli (AJB) drawn up before a land deed official, known as Pejabat Pembuat Akta Tanah (PPAT), which has jurisdic - tion over the land’s location. Full payment of the land price must be made upon executing the AJB at the latest. The official will assist in the registration of the title transfer to the local land office and in obtaining a land title certificate under the new title holder’s name. HGU, certain HM and HP designed for agricul - ture purposes require a land transfer licence to be obtained from the MOA before any transfer can take place. 2.4 Real Estate Due Diligence Buyers typically request a limited due diligence process, including reviewing: • the land title certificate; • any encumbrance or mortgage documents; • the payment of land and building tax or pajak bumi dan bangunan (PBB); • spatial planning conformity documents; and
• the corporate documents of the parties. For industrial estates, buyers often seek a thor- ough review of the estate regulations and envi - ronmental documents of the estate manager to ensure the business operations align with the estate’s designation. Buyers are advised to conduct land checks to obtain the land registration certificate from the local land office, confirming the status of encum - brances, disputes or confiscations, and to con - duct court searches to obtain a court clearance certificate indicating the property is free from disputes. Due diligence is crucial for potential buyers to identify property risks, verify ownership, assess the property’s status and examine its histori - cal background. By doing so, the buyer can be deemed as a “good faith buyer”, which is a form of legal defence if the transaction is disputed. 2.5 Typical Representations and Warranties Common representations in a commercial prop - erty transaction are as follows: • the seller is the sole and rightful title holder, and has full authority to transfer the property ownership; • the seller has obtained the necessary approv - als to sell the property, including corporate approval and obligations to third parties (such as notification or approval from lenders, estate managers or the HPL holder); • the seller has obtained the requisite govern - ment licence, specifically for HGU, certain HM and HP designed for agriculture pur - poses; and
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