Hak pengelolaan (HPL): when your land right sits on someone else's management right

HGB or hak pakai over HPL land runs the same 30 + 20 + 30 years. What it adds is a third party: the body that manages the land, approves every sale and charges for the use.

HPL in ten questions, each with its article

Some land in Indonesia is neither owned nor simply State land: the State hands it to a public body to manage, and that body grants rights over it to others. A buyer meets it as an HGB or hak pakai certificate that says the right sits “di atas Hak Pengelolaan”.

What HPL is, and who can hold it

Hak pengelolaan is the State's right of control, partly delegated to the holder (PP 18/2021 art. 1(3)). It comes from state land or customary (ulayat) land (PP 18/2021 art. 4), and it is held by central government agencies, regional governments, state- and region-owned companies, state legal entities, the Land Bank, or a legal entity the central government designates (PP 18/2021 art. 5(1)). It is not a right a private buyer can hold, and it cannot be mortgaged and cannot be transferred (PP 18/2021 art. 12(1)-(2)).

The holder may plan the land's use, use it or cooperate with others on it, and set fees or an annual payment under an agreement (PP 18/2021 art. 7(1)). In practice that means the HPL holder decides what the estate is for, grants HGU, HGB or hak pakai, under a land-use agreement (PP 18/2021 art. 8(1)(b)) to the developers and occupiers on it, and charges for it. Reclaimed land enters the same system: it can be given HPL or a land right only with a reclamation permit (PP 18/2021 art. 17(1)).

Where it comes from in the law

The 2023 job-creation law put HPL on a statutory footing. Where part of an HPL plot is granted as hak milik, that part leaves the HPL, and hak milik over HPL is only for public housing and transmigration (Law 6/2023 (Perppu 2/2022) art. 140(2)) — so a villa on HPL land is not going to become freehold. The details are in PP 18/2021, arts. 4 to 18.

HGB or hak pakai on HPL: the same right, a third party in the room

The term of an HGB over HPL land is the same as over State land: 30 years, extendable by 20 and renewable for 30 (PP 18/2021 art. 37(1)). What changes is who else is involved.

At the grant

HGB over HPL is granted by a ministerial decision based on the HPL holder's approval (PP 18/2021 art. 38(2)); hak pakai the same way, a ministerial decision based on the HPL holder's approval (PP 18/2021 art. 53(2)). Behind the grant is a land-use agreement, which must set out the parties, the plot, the use, the type and term of the right with its extension, renewal and transfer, the fees, the conditions and penalties, and what happens to land and buildings when the right ends (PP 18/2021 art. 8(2)). That agreement is the document to read before buying: the certificate tells you the right exists; the agreement tells you what it costs each year and what happens at the end.

For every later act

The right over HPL can be sold, mortgaged or released, but every such act needs a recommendation from the HPL holder, stated in the land-use agreement (PP 18/2021 art. 13(2)). Selling a villa on HGB-over-HPL, or borrowing against it, therefore has one more approval in the chain than the same villa on HGB over State land. The fee or annual payment in the agreement follows a formula set by the Minister (PP 18/2021 art. 9(4)), which we have not read.

At the end

When the grant, the extension and the renewal have run, the land returns to the HPL (PP 18/2021 art. 37(3)) — to the managing body, not to the State’s general pool. Extension and renewal are available only if the land has been used for the purpose the right was granted for (PP 18/2021 art. 41(4)). And if the HPL itself is annulled for an administrative defect, rights over it may also be annulled if the annulment decision says so (PP 18/2021 art. 14(2)). The HPL can also end by annulment, voluntary release, release for public interest, revocation by law, a grant of hak milik, or a finding that the land is abandoned or destroyed (PP 18/2021 art. 14(1)).

How to tell whether a property sits on HPL

The certificate says so. An HGB or hak pakai certificate states the land the right is granted over; look for Hak Pengelolaan and the HPL number. A developer marketing a project on HGB over another right must also state the number of the agreement with the underlying right-holder (PP 14/2016 art. 22D(1), as amended by PP 12/2021). Checking a certificate at the land office.

Then ask for three documents, in this order: the land-use agreement between the HPL holder and the developer or right-holder; the HPL holder’s recommendation for your purchase; and the schedule of fees or annual payments. Strata buildings can stand on HPL too — on HGB or hak pakai over state land or over hak pengelolaan land (Law 6/2023 (Perppu 2/2022) art. 145(1)). Strata title, article by article.

We do not say here which Bali estates are on HPL land. We have not read their certificates, and that is exactly the thing to check rather than assume. HGB explained. Hak pakai explained.

This is commentary on the official text, not legal advice. We are paid a fixed fee per enquiry, whatever you buy.

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