Property Ownership in Bali

 Freehold Methods

1: Hak Milik (the term for freehold title in Indonesian language) using Nominee structure

This is a contractual agreement - in this case between a foreigner and an Indonesian national whom he nominates to hold the Hak Milik title (on his/her behalf). This structure typically has several agreements (such as right to use and right to sell) as well as a mortgage agreement which states that the Indonesian nominee has borrowed the money in order to buy the property. This method has been used for many years now and a clear process has now evolved with legal precedents being established.

Simultaneously to acquiring the land, the Indonesian individual completes three additional agreements with the foreigner:

a: A loan agreement acknowledging that the foreigner has lent to the Indonesian citizen the purchase price of the land. This is then registered on the land exactly the same as a first mortgage or caveat. This is then noted on both the title at the Land Department and the copy held by the owner. There can be no dealing in the land until the loan agreement is cleared from the title. With the foreigner's loan details registered on the title, it also prevents the reissuing of new title deeds (due to "lost" title deeds) without the foreigner's consent.

b: An irrevocable power of attorney is signed giving the foreigner complete authority to sell, mortgage, lease or otherwise deal in the land. Without notice to the Indonesian Citizen, the foreigner can sell or otherwise deal in the land.

c: A permanent right of use agreement is completed, giving the foreigner rights to use and occupy the land.

To cover the event of death of the nominee, the Power of Attorney is drafted in such a manner so that the governing conditions are passed on to the heirs. In the event of subsequent dispute with the nominated Indonesian, the Power of Attorney allows the foreigner to sell the land to another Indonesian.

2: Corporate ownership

A foreign investment Limited Liability Company incorporated in Indonesia is commonly known as a PMA. All Indonesian companies whether they are Indonesian-owned or are foreign invested, are allowed to hold a 'Right to Build' title called Hak Guna Bangunan (HGB). In this case the freehold title (Hak Milik) is relinquished to the state and the company is given possession of the property under a right to use title (normally) granted for a period of 30 years with rights of extension (+20 + 30 years) - each extension subject to tax.

3: The 'Right to Use' (Hak Pakai)

Hak Pakai means "Right of Use" and works a little like a lease but is different in that the Hak Pakai certificate of title can actually be issued in the name of the foreign owner and the owner's interest is noted as an encumbrance on the Hak Milik title, unlike a leasehold structure.

The freehold Hak Milik owner grants the purchaser a Hak Pakai title of an initial 25 year term with a pre-determined amount of fixed term renewals. However, this has been a bone of contention with regard to the legalities of issuing such renewals and legal opinions vary on both the amount of renewals promised and the length of term of such renewals. As a result we are hesitant to recommend this variation of ownership.

 

Leasehold (or Hak Sewa)

This is a contractual agreement between the land owner and the foreigner. While leases are often notarized documents they have no official record of existence in the National Lands Department. As such there can be difficulties in enforcement when there are conflicting documents or multiple lease agreements.

A Typical Transaction

The following summary outlines the essential steps involved in a foreign investor transacting a Hak Milik ("Freehold Title") property in Indonesia.

Phase A- Due Diligence

The Notary initially checks all aspects of the Hak Milik property and advises in relation to any impediments to acquisition of the Hak Milik property.

Phase B - Hak Milik Transfer

Should the foreigner decide to proceed on the basis of the favorable outcome of the due diligence, the Indonesia Hak Milik owner executes with the nominee/designee of the foreigner, who must be an Indonesian citizen, either:

(a) an Akte Jual Beli ("AJB" or "Sale and Purchase Agreement") pursuant to which 100% of the purchase price is paid; or
(b) a Perjanjian Pengikatan Jual Beli ("PPJB" or "Agreement Binding for Sale and Purchase") pursuant to which a deposit is paid subject to payment of the balance of the purchase price. The deposit is generally not held by a stakeholder but is typically paid to the vendor.


Phase C - Power of Attorney etc

See  Freehold Methods. 1a, b and c above.

 Note: These laws were in place four or five years ago and some may have changed. Please also note that I did not write the above and so I take no credit for its production. It is in fact an old work document of mine that I found in my computer. Recently somebody asked me for information and I thought it may help anyone thinking of purchasing property in Bali.

Bali Thugs Target Young Female Tourists

Random photo, the people in this picture were not involved in the crime that was committed in the following story.

Recently I received an email from a friend of mine that lives in Bali. And I felt that it was important that I share this e-mail if only to warn people that they should be careful. On the same day I also read an article in my local Australian newspaper. It would seem to me that damming reports are coming out of Bali far too frequently. And I have to wonder just what effect this is having on the islands future tourist industry; the article seems to answer this question. The newspaper article can be found by following this link: https://www.facebook.com/baliraw

Hi Malcolm please feel free to use the following experience on your blog if you think it is appropriate.

A week ago I was sitting in a restaurant directly opposite the T-junction on the 1-way section of Legian Street, whereby you can turn left towards the memorial or right to Melasti Street. At the T-junction you have a new circle K on your right. Across the road in front of the restaurant there are normally a group of Balinese men with bikes numbering between 3 and 5 people. There seems to be a leader who is in his forties, he is well-built and he always wears dark glasses. I was waiting in the restaurant for my wife who was involved in a business meeting around the corner. And because I had nothing better to do I was keeping an eye on this group. I am also relatively fluent in Bahasa Indonesian and I know a smattering of the Balinese language. And so I could tell that they were speaking to each other in Balinese dialect.  

While I sat watching two more Balinese men showed up and they parked their bikes and then greeted the group. It was obvious to me that they were all friends or at the very least they were associates. There was then a bit of a commotion and the two new arrivals ran across the road and they entered the circle K convenience store. Inside the store were two young Western girls who appeared to be around eighteen or nineteen years old. The Balinese men then proceeded to place their arms about the girl’s shoulders and they began to flirt with them somewhat aggressively. Being that I have lived in Bali for the past fifteen years I see this all the time. And whether the girls like it or not, it is quite common for Indonesian men to behave in this way when approaching young tourist women. After the brief encounter in the convenience store one of the Balinese men came running outside. He then made a show to his mates that he was holding something under his right arm. I also noticed that he had a triumphant smirk on his face. He then ran to his bike and he jumped on and took off at speed down Legian Street. He was heading towards the bombing victims memorial. The two girls then followed him from the convenience store and I noticed that they looked very concerned. They were searching in a bag, and in their pockets, and it seemed obvious that they were they were missing something.

Hearing Australian accents and thinking that I may be able to help. I crossed the road and I asked the young ladies if there was a problem. One of the girls then told me that she had somehow lost her I phone. And that she had been using it moments before they had entered the store. I then quietly told them what I had seen and what I suspected. And I added that the man who had just left the store was associated with the men sitting across the street. I then noticed that the leader of the group and one of his associates had crossed the road and that they were standing behind me. When I turned both of them gave me a threatening, don’t become involved look. And when I backed off they then proceeded to ask the girl what her problem was.  The girl who had her phone pinched then yelled at him that his friend had stolen her phone from her. The leader then gave the girl a menacing look, and he then asked her in an obviously bullying tone what she intended to do about it. He did not seem too concerned that he was threatening a young tourist woman in broad daylight.

By that stage I had seen enough and so I then pulled the girls aside and away from the thug. I was worried that he might do something stupid and so I invited them to join me in the restaurant across the street. I then explained that there really wasn’t much I could do about getting the phone back. But I suggested that they find a policeman. And I told them where the nearest police box was located. I also told them that I would stay in the restaurant and keep an eye on the group until they returned. The girls then left to find the police and once they were gone. The group climbed onto their bikes and one by one they road past where I was sitting. The leader of the group was the last to leave and his threatening stare left me in no doubt that he wasn’t happy about my interference.

When the girls returned I called them over and I told them the Balinese men had left. I then apologised because I could not stop them from taking off. The young women then told me that they could not find any police to help. They then went on to explain that they knew the guys as they had met the night before. Their hotel was just up the road and they passed the spot regularly. Then the friend of the victim said they had been with them the night before and that she had also had her phone stolen. She added that she did not suspect it was the Balinese guys because they thought they were their friends. I should also mention that the girls had made a police report the previous night when the first phone was taken.

Malcolm I am writing this email is because although I have lived in Bali a long time. And I have never seen a crime this blatant being committed in the open. The theft was committed at lunchtime around 2 p.m. in the afternoon. The staff in the circle k could see what was going on and the staff members in the restaurant were also aware. I know this because I overheard them discussing the theft in Indonesian. I was also given the distinct impression that they did not care less about the robbery and that some of them found it amusing. I would also bet that if I were to go to that corner right now the same gang would be hanging around. What also struck me was how well the theft was organised and how well it was carried out. To my mind it was obviously well practiced. And therefore I would have to consider that this was not the first time it had been perpetrated. I was also shocked that the group had no real fear of police involvement and they were quite willing to use intimidation when questioned by the young lady.  

We all hear the stories of the nightly robberies in Bali and how the thieves prey on revellers who have had too much to drink. But it now seems that these thugs are willing to cowardly prey on young tourist girls in the middle of the day. And that they will do it on the main street with no fear of arrest. I have lived in Bali for close to fifteen years. But it is my experience that these crimes are getting far worse and far more frequent. I would also be able to identify the leader of the group to the police. But I was left with little doubt that I would put myself in danger if I did so. The leader of the group made this abundantly clear when he rode away from the scene of the crime.

Malcolm I love Bali and I have made it my home. But it really concerns me that some people within the Balinese community, not Javanese, would stoop to such a low act. Do they not realise that if they continue to prey on tourists, the very lifeblood of their economy, the tourists will stop coming?  Do they not understand that they are shooting themselves in the foot, and that they are going to hurt the wider and more honest members of their own community? It saddens me that it is coming to this but crime in Bali is escalating. And I have to say that after witnessing this event that I am now considering pulling up stumps and finding a less crime ridden place to live.

Bali's Islands a Brief History

A friend of mine often raves about the islands off Bali, specifically Nusa Lembongan. He loves the island and if he visits Bali he spend most of his time there relaxing, surfing and generally having a good time. Recently another friend opened a resort on the island at it inspired me to view some of the pictures I had taken on my many visits to Ceningan. I was going through my pictures and I came across a handful of good snaps taken by myself and others. And so putting two and two together I thought I would piece together an all too brief and very much dumbed down history of the islands. When I had finished I realised I could use what I had done for the Bali Raw blog.

It is believed that the three islands once formed their own kingdom centred on Nusa Penida. It is also supposed that this regime was separate from the main rule of the Balinese at the time. However it is also speculated that the regime did have connections with the South of Bali around the Bukit area. This is suggested because there are a number of temples in the area that are positioned and unified with the main temple on Nusa Penida, Dalem Peed. Dalem Peed is also considered somewhat of a Mecca for some castes of the Balinese people.  And it is expected that the Balinese with this this status visit the temple at least once in their lifetimes.

Eventually the Island Kingdom was subjugated by the Balinese. It is thought that the king who ruled from the area around the Dalem Peed was murdered in the last quarter of the seventeenth century. Just how he was killed is unclear. But after his death the islands of Lembongan, Ceningan and Penida were taken over by the rulers of Bali. These rulers then transformed the islands into a penal colony and they often shipped major criminals and political activists to their shores.

 

The isolation of the islands then brought about shift in the traditions and culture of the inhabitants. And eventually they began to cultivate their own unique customs and ceremonies. It is also believed that during this period a powerful black magic was developed and practised by the islanders. Word of this powerful magic soon reached the main island. And overtime the people inhabiting the three islands came to be viewed with a mixture of trepidation and religious reverence. Due to this fear the rulers of Bali soon stopped shipping there prisoners and they stopped sending boats to the islands. Then eventually the islanders were left alone by the rulers of Bali and they were allowed to govern by themselves.

The people of Bali were not the only ones who regarded the Island people with uneasiness and fear. Ancient navigation charts of the time are said to show the three islands marked with a skull and crossbones symbol. This was apparently done to warn sailors that under no circumstances should they harbour their ships close to the shores of Nusa Penida, Nusa Lembongan and Nusa Ceningan.

The information supplied above was taken from the internet and I have no way to verify its authenticity. All in all it is a bit of fun and an excuse to show off some pictures. But thankfully true or not all of this has changed. And a trip to Bali would not be complete without at least a visit to Nusa Lembongan and Nusa Ceningan. For the more adventurous it is also becoming possible to visit Nusa Penida.

To view more pictures of Ceningan Island or to learn more about my friends resort please feel free to visit these two sites.

https://www.facebook.com/jettyonceningan?ref=stream

https://www.facebook.com/baliraw?hc_location=timeline

Five tips for western men wanting to date Indonesian women.

 

 

 

Never leave an Indonesian girl unattended in a swimming pool

It is necessary to understand that a number of Indonesian women do not know how to swim. Although Bali is an island the Balinese people tend to avoid swimming in the ocean. Due to tourist influence the culture is changing. But before the arrival of tourists the people of Bali would only enter the ocean if it was unavoidable. Also many of the women that come from other places in Indonesia grow up in rural environments. They did not have swimming pools and the ocean was too great a distance and impossible for them to reach. A number of these women were also raised in a semi strict Muslim culture where modesty is considered very important. They would not get away with strutting around in a bikini back in their home villages.

It is important for men that date Indonesian women to remember this. And it is wise for them to have a go slow approach if they want their lady to join them in the swimming pool or for a dip down the beach. With the right sort of encouragement and support an Indonesian lady will enjoy the water. And she will do her best to learn how to swim. But it may take time and a lot of time frolicking in the shallow end of the pool. Teaching an Indonesian woman the basics of swimming is also a great way to get to know her, and it is certainly a laugh. Just be careful not to let her swim in the deep end alone as I promise you she will sink like a stone if you do.

Don’t get nervous if your Indonesian lady talks to her friends in her own language

I was sitting with a friend who was new to Bali and to dating Indonesian women. And he was having a real problem because the love of his life would chat to her girlfriends in her own language. He could not understand what was being said. And for whatever reason, this always left him thinking that they were talking about him. My friend then told me he was thinking of learning the language so he knew what was going on. Learning the language is a great idea. But it is also important to remember that if an Indonesian lady does not want you to understand what she is saying, then you won’t. She will either switch dialects or she will speak so fast that you won’t have a chance in hell of catching up.

When my friend told me about his problem, I told him that when he had the opportunity he should eavesdrop on a conversation between two women from his own country. And that he should listen for as long as he was able before he became bored. At the risk of sounding sexist, Indonesian women chat about the same things that western women chat about. They chat about their friends and family, shopping, food, and paying the rent. They pretty much chat about any topic that comes up in a normal conversation between women. Although the men in their lives are important they are not the be all and end all of their discussions. Put simply, if you could understand what your Indonesian girlfriend was saying to her friend. Then you probably would not be that interested anyway.

Respect her family and understand her culture

This is probably the most important one of the five. An Indonesian woman will have two great loves in her life and you will never supersede them. Your Indonesian partner will also take the time to teach you what your role is with her family and her culture. And if you are open to learning you will understand that they are reasonable and simple. You may be expected to offer some type of financial support to her family if it is needed, but if she is honest this will only be when it is needed. It is also wise to put in place boundaries, but if you are also honest about what you can afford. Then what she asks for will never be beyond your means. You will also be expected to give her the freedom to practice her traditions and at certain times to be available to join her on these occasions. Basically you will be asked to meet the family and to join in some celebrations. This is what a woman from your own country would expect within a relationship.  And I would suggest that you go along and enjoy it, you might just have fun.

 If you do these things your Indonesian girlfriend she will reward you with everything a relationship with an Indonesian woman has to offer. Indonesian women can be very caring, loving, supporting and fun to be around. The rewards of dating an Indonesian woman will far out way the small sacrifices you may be asked to make.

Watch your phone because she will be watching it

If you get the chance watch an Indonesian woman use her phone. You will then notice that her fingers swipe the screen so fast that they become a blur. You should also have no doubt that this woman is reading and digesting information faster than any super computer. Now imagine this same woman with your phone in her hands and you may get my point.  Indonesian women view an unattended phone as an invitation, they will pick it up and they will look. Never leave your phone where she can get her hands on it if you have something to hide. They are also able to remember every call and text made from the phone in a matter of seconds.  

Don’t eat her food

You may be sitting at a restaurant with your Indonesian girlfriend and she may offer you a taste of her food. And then you may think it will hurt her feelings or be unmanly if you refuse to take a bite. Now take a look in your girlfriend’s eyes and ask yourself see if you can see a glint that you haven’t noticed before. That glint is female Indonesian cruelty and she would like nothing more than to watch your head explode. Remember your Indonesian girlfriend has been eating hot food since the day she was born. And have no doubt that the mother’s milk she was weaned on was laced with the hottest chillies available in Indonesia. It doesn’t matter how good you are at eating spicy food you cannot compete with her taste buds. It is also a well-known fact that you can strip paint with an Indonesian women’s food. The food may look tasty but it is lethal and it will kill you. The best thing to do is to politely refuse the taste and then hope she doesn’t offer again.