PP 12/2021 in English: buying a house or unit off-plan

The regulation that sets what an off-plan developer must show, when a PPJB may be signed, how much it may take before then, and when the money comes back.

PP 12/2021, the articles an off-plan buyer meets, in order

Buying a house or a unit before it is finished is regulated in Indonesia, and in more detail than most buyers are told. PP 12/2021 rewrote PP 14/2016 on housing to set out a whole “PPJB system” — marketing, payment, cancellation, the agreement — and took over from the ministerial regulation that used to govern it, revoking Permen PUPR 11/PRT/M/2019 on the PPJB system (PP 12/2021 (JDIH BPK status: Mencabut)).

Before you pay anything: what the marketing must already show

A developer may market a house during construction, or a strata unit before construction starts, but only once it has zoning certainty, land-right certainty, certainty of the ownership status, a PBG, and a construction guarantee (PP 14/2016 art. 22C(1), as amended by PP 12/2021). The marketing must be true, clear, and certain about the plans and the physical condition (PP 14/2016 art. 22B(2), as amended by PP 12/2021), and it must state the spatial-plan letter number, the land certificate number, the bank or non-bank support letter, the PBG number and date, the site plan, the specification and floor plan, the price, and the promised infrastructure (PP 14/2016 art. 22D(1), as amended by PP 12/2021).

That list is a checklist you can run against a brochure. A certificate number you can check at the land office, a PBG number and date, a support letter from a bank: if a brochure for a Bali project carries none of them, it is not the marketing the regulation describes. And the developer cannot hide behind its sales team — it is responsible for what its marketing or sales agents tell buyers (PP 14/2016 art. 22G(2), as amended by PP 12/2021). What an agency itself must show.

The first payment changes the developer’s duties

Money paid during marketing counts toward the price, and once the developer takes any it owes you the construction schedule, the PPJB signing schedule, and the AJB and handover schedule (PP 14/2016 art. 22F(2), as amended by PP 12/2021). Those dates are what the refund rule hangs on: if the developer misses the construction or PPJB date, you may cancel and payments are returned in full (PP 14/2016 art. 22H(1)-(2), as amended by PP 12/2021). If you cancel for your own reasons, the developer may keep a deduction the regulation words as 'paling rendah 20%' of the payments received, plus taxes accounted for (PP 14/2016 art. 22H(3), as amended by PP 12/2021). Either way the refund is due within 30 calendar days of the cancellation letter, with a penalty of 1 per mil a day for lateness (PP 14/2016 art. 22H(6)-(7), as amended by PP 12/2021).

The PPJB itself: five conditions, seven days, 80%

A PPJB may be signed only after certainty of the land status, of what is agreed, of the PBG, of infrastructure, and at least 20% built (PP 14/2016 art. 22(5), as amended by PP 12/2021). Twenty percent built is defined: 20% of all the units plus the infrastructure for a housing estate, or 20% of the construction volume for a strata building, per the supervising consultant's report (PP 14/2016 art. 22I(7)-(8), as amended by PP 12/2021). The land certificate is shown to the buyer at the signing, and a certified copy of the PBG handed over (PP 14/2016 art. 22I(2), (4), as amended by PP 12/2021).

You are entitled to read it first, for at least 7 working days (PP 14/2016 art. 22K(2), as amended by PP 12/2021), and it must cover the parties, the object, the price and payment, the developer's guarantee, rights and duties, handover date, maintenance, use, transfer, cancellation, and dispute resolution (PP 14/2016 art. 22J, as amended by PP 12/2021). A developer pressing for a same-day signature is asking you to waive time the regulation gives you.

The 80% line

Until the five conditions are met, the developer may not draw more than 80% of the price (PP 14/2016 art. 22L(1), as amended by PP 12/2021). That is a ceiling, not a recommended schedule: a payment plan that reaches 80% while the site is still a field is at the limit of what the regulation allows, not inside it. After the PPJB, if the deal collapses through your fault, the developer keeps all of it if the buyer had paid up to 10%, and deducts 10% of the price if the buyer had paid more (PP 14/2016 art. 22L(3)-(4), as amended by PP 12/2021).

What the system does not reach

The system covers public and commercial houses, terraced houses and strata units sold into ownership (PP 14/2016 art. 22(4), as amended by PP 12/2021). Most foreign buyers in Bali do not buy into ownership: they take a lease, or hak pakai, or buy through a company holding HGB. On our reading, a leasehold villa sold off-plan is not a sale of a house, and the PPJB system does not obviously reach it; the protection there is the lease contract. A foreigner buying a house as hak pakai, or a company buying HGB, from a developer is buying into ownership and is inside the system. Leasehold explained.

For strata units the same rules appear in the strata law itself, which adds owners’ associations and the strata certificate — Law 20/2011. The tax a PPJB triggers is in PP 34/2016.

This is commentary, not legal advice. A notary reviewing your PPJB will know how these articles are applied in your regency.

Questions on this page