Using a nominee to purchase land

its illegal to use a nominee to buy land , you can lease only,

interestingly i was speaking about the questionable advice given by lawyers  yesterday on the forum but it seems to have disappeared

Jacqui, you are taking a huge gamble using a nominee for land “purchase” as the article below makes clear. 

http://indonesiaexpat.biz/featured/fore … indonesia/

“Interestingly i was speaking about the questionable advice given by lawyers  yesterday on the forum but it seems to have disappeared”

If you mean this discussion, it's still here…

https://www.expat.com/forum/viewtopic.php?id=532600

Hi Ubudian - I was hoping to attract your attention! My partner's story is long and involved...it will probably take many chats to get it all out...

Thanks - Yes you are correct very big gamble. The land was to be under the nominee only whilst the HGB was being created (as this was apparently going to be lengthy) - our nominee has been very keen on the land being placed into another entity asap (she must have known that it was illegal for her to be a nominee - but as she also sold the land to my partner she did not want to miss out on the sale so took the risk).
Yes... she was the real estate agent... and now the nominee. She is still keen for us to remove her as nominee but we have no one else to use nor do we want another nominee. We want a safe manageable legal entity to place the land in...
Initally the plan had been HGB (cannot afford and too difficult to re sell land if proposed business venture not realised).  Now my partner is looking at Hak Pakai. Apparently this takes at least a month...and we are aware that it requires KITAS (although this is also unclear as we have been informed a multiple entry business VISA  can be used - if sponsored by an Indonesian Company)?

One of our legal team has offered to sponsor us - but this makes no sense to me as apparently the sponsoring company should be 'related' to your profession.. we are not lawyers ..a miner  and  a teacher seeking to build  3+ star huts/ eco accom/honeymoon/divers destination (3 star or above to comply with the negative investment list requirements if you do not wish to involve a indonesian business partner). * We had every intention of providing employment for locals and paying tax - not trying to suck anyone dry but just trying to be safe!

I should mention that I am pretty sure that all of his/our dreams are now in tatters(just too hard) so he is just looking at how to legally sell the land and recoup his losses if possible - hence the Hak Pakai until such time as we get a buyer.

Hope this makes some sense!

So...any info on Hak Pakai would be appreciated - and how o get the sponsor required to do so....

Thanks again

Jacqui

If I'm reading your story correctly, and the objective is to simply get out from under this mess, then why not simply ask your nominee (the real estate agent) to sell the property again, to someone else?  I don't see any point, or advantage to encumber the Hak Milik (land deed) with a Hak Pakai, as that will only make the property less desirable.   

In the “old days” when using a nominee was more or less overlooked by the government (although essentially still in violation of the law as it is now being interpreted), the Indonesian nominee would complete three documents, a loan agreement, an irrevocable power of attorney, and a right of use lease. 

The following is as good as any description of that in more detail:


- terrymagee.info/regulations-ownership-indonesia

Your partner may just as well be better off proceeding on that basis (as described on that web site) and keep his fingers crossed. 

To your advantage, but likely only temporarily, the government is concentrating more on Bali and Lombok than anywhere else right now. 

The biggest risk, as I see it right now, is that your real estate agent/nominee is trustworthy. 

Good luck!

Thanks again

Yes I think that he is now thinking this may be the only option if he is going to sell - but he is stinging as he has paid her commission to buy and now will pay commission to sell..as well as having paid for the land to be converted from Sporadik ...to being certified...the associated fees... the notary fees ...the power of attorney etc etc .It has all added up and I think he may be looking at a significant loss. To that end I think he is clutching to the idea that if he gets Hak Pakai and begins to build something that may attract a buyer and improve the property it may help the process. (I am trying to get more clearer details as we speak as I pretty much left this dream in his hands but as he is now in a pretty bad way with it all I am trying to understand and help).

And yes we hope that our nominee remains trustworthy !

Thanks for your input so far.

The two disadvantages to him using a Hak Pakai is the requirement that he be domiciled here in Indonesia, and an Indonesian is not going to be as interested in a property titled by Hak Pakai as opposed to Hak Milik…in other words he will be limiting his re-sale market.

I honestly don't know if a multiple entry business visa is acceptable for Hak Pakai or not.  I've always been of the understanding that it's for KITAS holders only. 

Personally, if I were in his shoes, I would not be throwing more money into a project that I only want to get out of with as much skin intact as possible. 

Once again, good luck.

The multiple business visa is worth nothing if one plays according to the rules no matter what people telling you.

The whole thing is illegal as mentioned before and one should not waste more money simply one can not buy land as a foreigner.

Except you have so much funds available or aside that you don't really care to loose it one day.

Hi. We are 'purchasing' land which is currently hak milik. We have a family member in Java who will act as nominee. The land is on another large island. Throughout our research we have been repeatedly told that hak pakai is the only way to go as we will not be forming a corporation. We are simply moving there to retire.
With the hak pakai we can build a home and live there in a reasonably normal status. Also we are told that in hak pakai that the government will have our names listed as registered certificate holder for the term of the hak pakai agreement.
Is this so?

Hi. We are 'purchasing' land which is currently hak milik. We have a family member in Java who will act as nominee. The land is on another large island. Throughout our research we have been repeatedly told that hak pakai is the only way to go as we will not be forming a corporation. We are simply moving there to retire.
With the hak pakai we can build a home and live there in a reasonably normal status. Also we are told that in hak pakai that the government will have our names listed as registered certificate holder for the term of the hak pakai agreement.
Is this so?

Yes, what you say is correct, but why do you need a “nominee” from Java when you could engage the Hak Pakai directly with the current owner of the land?  The Hak Pakai will supersede the Hak Milik, and indeed, it will be filed (or should be filed) with the local land office.

Two other considerations.  You mention “The land is on another large island.”

-Hire an attorney on that other large island and do not rely on a notaris alone. 

-Be sure to engage with the kepala desa (head of the village) where this land is located to be sure your plans meet with the approval of the banjar and that there are no particular encumbrances or restrictions by the banjar applicable to this land.  Such customary village encumbrances or restrictions are most often not mentioned on existing Hak Milik deeds.  Also, you don't want to be regarded as a stranger in this village, but rather you want to be regarded as a new community member.   

All sorts of little problems can emerge without a full investigation of any customary usage of that land by villagers as say farming, right of way (passage), etc.  Also, if that land has a lot of trees that you will be clearing, make sure it's understood who owns the trees once cut down.  Very often the seller will rightfully claim ownership to those trees. 

Cheers, and good luck.

Very nice. Thank you for all of that.
We are using a family member as nominee so in case something strange happens at least the land is still in the family. I do appreciate the advice rgardinf contacting the local community leader. That step can help wih relations down the road.
Appreciated
Mike