23
Apr2021

Implementation of Government Regulation No. 13 of 2021 concerning The Operation of Condominium

The fulfillment of the right to have a home has become one of the obligations of the State in order to provide protection to all its people, this is in line with the provisions of Article 40 of Law No. 39 of 1999 on Human Rights (“Law 39/1999”), which states that everyone has the right to live and live a decent life. Unfortunately, the availability of houses has been a national problem that runs for quite a long time, considering the domestic development that is not directly proportional to land limitations in Indonesia. In order to actualize the mandate of Law 39/1999, one of the solution offered by the Government concerning this problem is by the construction of condominium that can later be utilized and reach easily for many people.

Now the implementation of the operation of condominium is regulated under Government Regulation No. 13 of 2021 concerning the Operation of Condominium (“GR 13/2021”) which is a mandate from Law No. 11 of 2020 concerning Job Creation (“Law 11/2020”).

With the new enactment of GR 13/2021, we note some important points that can be used as a reference for businessmen who plan to invest in developing or operating condominium in Indonesia. The key points which we like to convey will be explained further as follows:

 

  • Party Who Can Develop Condominium

It is stated that everyone can conduct the development of condominium, which means that not only limited to individual but also includes a legal entity. The development of condominium can also be done through a foreign investment.

 

  • Functions and Types of Condominium

Types of condominium includes :

  1. Public condominium, is condominium which organized to meet the needs of homes for low-income people;
  2. Special condominium, is condominium which organized to meet special needs;
  3. State condominium, is state-owned condominium to serve as residences or residences, family building facilities, as well as supporting the implementation of the duties of officials and /or civil servants;
  4. Commercial condominium, is condominium organized for profit.

Party which develop condominium (“Development Party”) must build the condominium in accordance with the permits of the function plan and its utilization.

 

The utilization of condominium can be carried out for residential functions or mixed functions. The mixed functions are a mixture of residential and non-residential functions (business, meeting places for organization or religious act, and so on).

 

  • Development Process of Condominium

Every Development Parties of commercial condominium construction must provide public condominium with an area of at least 20% (twenty percent) of the total area of commercial condominium to be built. The construction of public condominium does not have to be in the same area as long as it is still in one regency/ city. The construction of public condominium may be converted into form of funds for development by submitting conversion calculations to the office which accelerate the implementation of housing. If the Development Parties does not meet this obligation, they may be subject to face administrative sanctions.

The construction of Public Condominium and Commercial Condominium can be built over the land with (1) right of ownership, (2) right to build or right of use over state land, (3) right to build or right of use over right of management.

The Development Parties of the construction are obliged to separate the Condominium over the Condominium Unit (“Sarusun”), Joint Objects, Joint Sections, and Shared Land. This separation is important to provide clarity over the Sarusun boundaries that can be used separately for each owner and the boundaries of shared parts and shared objects that are the right of each Sarusun. This separation must be set forth in the Separation Act (“Akta Pemisahan”).

The management of condominium must be carried out by an incorporated manager, in which case the manager must be registered and obtain a business license. This management responsibility is charged to the Association of Owners and Residents of Condominium Units (“PPPSRS”) to form or appoint a Legal Entity who capable of managing the condominium. The scope of the management of condominium includes the operational activities, maintenance, maintenance of Shared Parts, Shared Objects, and Common Land.

 

  • Standard of Condominium Construction

The construction of condominium must meet the development standards which includes, (1) administrative requirements, (2) technical requirements, and (3) ecological requirements.

The Administrative requirements include:

  1. the status of land rights;
  2. building construction approval (PBG).

Furthermore, the technical requirements include:

  1. building layout consisting of architecture and provisions for allocation and insensity;
  2. reliability of the building covering aspects of safety, health, comfort, and convenience.

Last but not least, the ecological requirements include harmony and balance of environmental functions.

 

  • Issuance of Certificate of Property (“SHM”) and Transfer Rights of SHM

Before Sarusun was sold, the Development Parties applied for the issuance of SHM Sarusun to Government Agency that conduct government affairs in the field of land. In the application, the Applicant must attach:

  1. The Akta Pemisahaan attached with detail of division (Pertelaan);
  2. Certificate of rights to the Common Land;
  3. PBG;
  4. Certificate of function;
  5. Identity of the Development Parties.

SHM will be published on behalf of the Development Parties. In the event that Sarusun has been sold, the Development Parties proposes of the transfer right of SHM Sarusun on behalf of the Owner to the government agency that organizes government affairs in the field of land.

In the event of a transition of SHM Sarusun through sale and purchase or inheritance, the transfer must be made before the Land Deed Office (Pejabat Pembuat Akta Tanah).

 

  • Incentive for Public Condominium Development

The Central Government and/or Local Government can provide incentives to the Development Parties of condominium in the form of:

  1. Facilitation in land procurement;
  2. Facilities in the soil certification process;
  3. Facilitation in licensing;
  4. Facilitation of construction loans with low interest rates;
  5. Tax incentives in accordance with the provisions of the laws and regulations; and/or
  6. Assistance in providing public infrastructure, facilities, and utilities.

 

  • Sanctions

In implementing GR 13/2021, the Government supervises every process of organizing condominium, if there are parties who violate the provisions of GR 13/2021, they may be subjected to administrative sanctions ranging from written warnings to revocation of business licenses. The imposition of administrative sanctions did not eliminate the responsibility of recovery and criminal sanctions.

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