Every country has its laws and regulations on property obligations and responsibilities. The real estate law in Indonesia is tough to understand for foreigners. Many expats need assistance understanding property law in Indonesia, especially regarding rental agreements. This article guides foreign investors seeking to understand residential leasing guidelines, landlord obligations, and property liabilities in Indonesia before entering the Indonesian real estate market.
Rights, obligations, and responsibilities for landlords in Indonesia
In Indonesia, a landlord is a person or business that owns land or property and rents it to others. The ICC (Indonesian Civil Code) says several significant landlord obligations and responsibilities exist in Indonesia. The landlord in Indonesia has to:
- Pay the annual Land and Building Tax (PBB).
- Obtain insurance for the property or land.
- Repair the property of the premises, which includes the landlord’s obligation to repair major structural issues and minor problems such as broken air conditioning or water heater.
- Provide the tenant with an official written notice of termination if ending the leasehold.
- Deliver the leased property or land in a well-maintained condition.
- Ensure the maintenance of the leased real estate so it remains functional for its intended purpose.
- Provide alternative accommodation if necessary due to repairs or other issues.
Moreover, the landlord’s legal obligation extends to ensuring tenant safety. This underscores the responsibility of a landlord to guarantee a secure living environment.
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Responsibilities and obligations of a tenant in Indonesia
According to the rental agreement in Indonesia, a tenant also has specific duties and responsibilities. The tenant has to:
- Pay the lease price on time.
- Granting the landlord access (preferably by appointment) for inspection, maintenance, or repairs, in adherence to tenant rights and landlord obligation.
- Use the leased property as stated in the rental agreement in Indonesia.
Additionally, the tenant’s responsibility for maintenance and minor repairs is implicit unless specified otherwise.
Property liability in Indonesia: Addressing destruction or damage
In scenarios where the leased property faces destruction beyond the control of the involved parties, property law in Indonesia under the ICC states that the lease is void. The landlord pays for reparations, but the tenant has no compensation rights.
The renter can end the lease, accept repairs, or change the rent when the damage is only partial. The landlord pays the cost of repairs. The pest control responsibility of the landlord or tenant should also be outlined in the lease agreement.
When repairs exceed 40 days
If the tenant chooses reparation and the repairs take longer than 40 days, the rent must be adjusted accordingly to the situation. If the tenant cannot use the leased real estate during the reparation period, the tenant can choose to terminate the lease.
Damage caused by the tenant
The tenant is liable for repairs or replacement when the leased real estate is damaged or destroyed by the tenant. This liability means the tenant has to pay the total reparation costs.
Insurance obligations for leased property in Indonesia
The landlord or owner of the property is responsible for insuring the leased real estate. However, the tenant is responsible for insurance of their household assets, such as furniture, clothing, and other personal items. The landlord has no obligations or responsibilities when something happens to the household assets of the tenant.
What happens to the lease when the landlord sells a leased property?
What are the obligations of a landlord when selling a leased property? The landlord can sell the property during the lease. As per ICC, this does not terminate the lease unless otherwise specified in the rental agreement in Indonesia.
Transferring or subleasing property in Indonesia
Tenants can transfer the leasehold or sublease only with the landlord’s written consent unless the lease agreement dictates otherwise. This comes with special obligations and responsibilities. For example, the tenants must know the potential tax implications, such as rental income tax or corporate income tax.
Understanding real estate law in Indonesia, especially landlord obligations and tenant responsibilities, is crucial for a hassle-free leasing experience. Whether it’s the landlord’s obligation to repair or the tenant’s responsibility for maintenance, every aspect of the commitments and responsibilities plays a vital role in shaping the landlord-tenant relationship.
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Do you want to buy property in Indonesia? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in the Indonesian market, we can help with legal requirements, finding suitable properties, negotiating the best deals, and conducting due diligence.
With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!
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Frequently Asked Questions (FAQs)
Can you sublease a property in Bali?
Yes, subleasing a property in Bali is possible if you have the landlord’s written consent unless specified differently in the rental agreement. Understanding the obligations and responsibilities of property law in Indonesia is crucial for subleasing property in Bali.
What is a leasehold in Bali?
A leasehold in Bali is a form of agreement under Indonesian real estate law where an individual or entity holds the right to lease property or land for a certain period. Foreigners commonly use this system due to restrictions on direct property ownership.
Who pays for the maintenance and repairs?
Under the property law in Indonesia, the landlord is generally responsible for major repairs and maintenance of the leased property. However, the tenant’s responsibility for repairs and maintenance may also be included in the lease agreement, usually for minor issues.
What are the responsibilities of a landlord in Indonesia?
The obligations and responsibilities of a landlord in Indonesia include paying annual land and building taxes, obtaining insurance for the property, maintaining the leased property, providing official notice in case of terminating the leasehold, and making necessary repairs.
What are the responsibilities of a tenant in Indonesia?
According to the rental agreement, the obligations and responsibilities of a tenant in Indonesia include prompt payment of the lease price, providing access to the landlord for inspection, maintenance, or repairs, and utilizing the property as per the terms mentioned in the lease contract.
What are a landlord’s obligations to his tenants in Indonesia?
A landlord’s obligations and responsibilities to his tenants in Indonesia involve ensuring the maintenance of the leased property, providing a safe and secure living environment, carrying out structural repairs, and sometimes providing alternative accommodation.
Is the landlord in Indonesia responsible for the maintenance?
Yes, the landlord is generally responsible for maintaining the leased property in Indonesia. This obligation is part of the residential leasing guidelines set out in Indonesian real estate law. However, some duties and responsibilities may be passed on to the tenant, which should be clearly outlined in the lease agreement.
