INDONESIA Law and Practice Contributed by: Yogi Sudrajat Marsono, Heru Pamungkas, Agnes Maria Wardhana and Andin Aditya Rahman, Assegaf Hamzah & Partners
In carrying out the management, PPPSRS is entitled to receive and manage management fees, payable by the owners and occupants (lessees) in proportion to their ownership. Typi - cally, management fees consist of operational costs, maintenance costs and repair costs. The operational and maintenance costs are charged to the occupants/lessees, while repair costs are charged to the owners. 6.10 Payment of Utilities and Telecommunications The Apartment Law provides that utilities and telecommunications costs for properties with multiple lessees are shared proportionally by owners and occupants through management fees handled by the PPPSRS. 6.11 Insurance Issues The lessor usually insures the building, while some agreements require lessees to insure items within the properties. Lessees’ ability to claim business interruption due to the pandemic depends on insurance policy terms. However, such claims are often denied, as pandemics are not usually consid - ered valid reasons to defer obligations like lease payments. 6.12 Restrictions on the Use of Real Estate Article 99 of the Apartment Law imposes restric - tions on certain kinds of use, such as damaging or altering public infrastructure, endangering others or public interests, violating regulations, changing the agreed upon function or use of the apartment building, or diverting public infra - structure and common facilities for the develop - ment or management of the apartment building.
In addition, lessors may specify restrictions in the lease agreements, such as limiting the use of properties in a manner consistent with the permitted zoning and the lessee’s business licences. 6.13 Tenant’s Ability to Alter and Improve Real Estate Generally, according to Article 1554 of the Indo - nesian Civil Code, the party leasing out the prop - erty is not allowed to alter the form or arrange - ment of the leased property during the lease term. However, parties to a lease agreement may agree otherwise. Typically, lessees are required to obtain prior approval from the lessor for such alteration. In the context of a lease of space (in a building), structural alteration by a lessee is not allowed. Furthermore, if modifications are desired, besides needing the lessor’s consent, they must also comply with the existing Building Construc - tion Permit of the relevant building. 6.14 Specific Regulations There are no specific regulations that apply to leases of categories of properties, such as resi - dential, industrial, offices, and retail or hotels. Leases of land or property in Indonesia are pri - marily governed by the Indonesian Civil Code, with additional regulations such as the Apart - ment Law. These laws outline the rights and responsibilities of lessors and lessees. The Apartment Law categorises apartments into four types:
• public apartments; • special apartments; • state apartments; and • commercial apartments.
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