Indonesia is a country that has beautiful natural wealth. Several regions in Indonesia have become tourist attractions because of their spectacular natural beauty. Some tourist attractions in Indonesia that are known to the world are Bali, Lombok, Sumatra, Sumba, and Java. Indonesia’s natural beauty also makes tourists interested in living in Indonesia. Moreover, property prices in Indonesia are low compared to property prices abroad. Not only is property relatively cheap, but the cost of living in Indonesia is also much more affordable than in other countries. For culinary matters, Indonesia is one of the countries that provides delicious food. Not only Asian food, but Western food is also widely sold in Indonesia with delicious flavors and prices that are still relatively standard.
All these things are the reasons why foreigners like Indonesia. Foreigners can enjoy a comfortable home, with spectacular views, tranquility, some areas with a rural atmosphere, and easy access to Western food if they miss the cuisine of their home country. Many foreigners often ask how to rent property in Indonesia. This question is often asked because as foreigners, they do not understand the regulations in Indonesia. However, there are quite a few foreigners who know the requirements for owning property in Indonesia, but they do not follow the appropriate regulations for owning property in Indonesia and end up having problems with the law.
The following are general things that need to be considered and prepared when renting a property in Indonesia:
- Looking for property.
The main thing is to find a property to rent. When discussing this, renters often look for properties just by looking at the price. When they see a cheap price, renters are easily tempted to rent the property without first researching the facilities in the area and the rules in that area. Property close to shops, restaurants, schools, hospitals, shopping centers, and tourist attractions is the strategic property and the price will be much more expensive. However, the benefits obtained from this strategic location are perfect. Not only is the location perfect, but another advantage is that it will also be easier for the tenant to transfer the contract to another party if the tenant decides to return to his country. Tenants often get back the rental costs they incur when they transfer the contract to a third party because of this strategic location. - Due diligence.
The most important thing before making property payments in Indonesia is to do due diligence. Rental regulations in Indonesia are different from foreign countries, therefore Tenants need to carry out Due Diligence before renting a property in Indonesia. Most tenants think that due diligence is not necessary for the reason that the tenants know the property agent or know the property owner well, so they feel that everything will be fine and ignore the importance of doing due diligence until the tenants end up having a problem, which causes These tenants suffer losses and even spend more money to solve the problems they face. Another reason tenants do not carry out due diligence is because of the extra costs they have to pay apart from rental costs. The tenants feel that the price for Due Diligence is quite expensive so they often ignore how important it is to do Due Diligence, even though in fact if you look at the costs incurred to rent the property, including the consequences that the tenants must accept if a problem occurs with the property, the losses will be experienced by tenants is much greater than the due diligence costs. This is something that tenants often forget and ignore. Tenants need to be wiser in making decisions before renting property by thinking about the consequences that occur if they do not carry out due diligence, such as losses when renting when tenants have to resolve legal issues related to the property, as well as the time spent and mental burdens that can cause health problems. Therefore, carrying out due diligence is the most important thing and is highly recommended to do, before making any payments. - Choose a notary.
The mistake that tenants often make is trying to save money, which causes big losses and even bigger losses than the rental costs incurred. Many tenants avoid using notary services because they are considered expensive, but that is not the only reason tenants avoid using notary services, several other reasons are because tenants want to avoid rental taxes. Regarding rental tax, usually, this tax is paid by the property owner, but often the property owner does not want to pay any costs when they lease their place to a tenant and asks the tenants to pay the rental tax. When this happens, tenants often object, so they finally decide to make an individual agreement only with the property owner (Called Perjanjian Dibawah Tangan) and think that by making an individual agreement, both parties do not need to pay rental taxes and do not need to pay extra costs to the notary. Another thing that often happens is that tenants with the property owner to make an agreement and then the tenant and property owner go to the notary together to get the notary’s stamp. Often according to the tenants, an agreement like this is an agreement made by a notary (Called an AKTA SEWA – AUTHENTIC DEED), but this agreement is not an AKTA SEWA (AUTHENTIC DEED). An agreement like this is an individual agreement (Dibawah tangan) and the notary only carries out WAARMERKING (pembukuan). The meaning of WAARMEKING is the recording of documents that have been created and signed by tenants and property owners individually outside the notary’s office, for example, both parties signed the agreement at the property owner’s residence, in a restaurant or at the agent’s office and then this document is taken to the notary’s office and then written down this agreement into a special book made by a notary. Tenants need to understand the differences between each type of agreement they sign and need to follow government regulations if they don’t want problems in the future. Participating together with the property owner in avoiding payment of rental tax is a legal violation that can cause problems in the future. Making an agreement (AKTA SEWA – AUTHENTIC DEED) in the notary office may be much more expensive, but making an agreement (AUTHENTIC DEED) is the best option for the tenants. - Check the lease agreement.
A lease agreement is an agreement made by both parties by applicable legal regulations. However, lease agreements drafted by the property owner, property agent, or notary often do not cover all the things that need to be mentioned in an agreement. What often happens is that agreements only mention the lease value, lease period, and the right to transfer the lease to a third party, but do not mention the most important points, specifically those needed for the security of the parties. Checking the agreement is the second most important thing to do before making any payment to ensure that the rights, obligations, consequences, and everything agreed upon by both parties have been stated in the agreement. - Passport.
Each tenant must provide a copy of their passport and show their original passport during the transaction.
If you have a permanent residence permit (called KITAS/KITAB), then you also need to provide a copy of the valid permanent residence permit issued by Immigration.
If you own a foreign company and intend to lease the property using your company, then you must also include the company documents (permits and deeds of establishment need to be checked first by a notary before signing the lease).
For further information regarding a property or legal matters, please book an appointment or contact +62858 5743 8882 (email: contact@balilawyer.net)
