Many companies buy land first and build later. Funding has not been disbursed, permits are still in process, or business plans change. As long as the Right to Build (Hak Guna Bangunan, “HGB”) or Right to Cultivate (Hak Guna Usaha,“HGU”) certificate remains in the company’s name, the land is usually considered safe. Since 6 November 2025, that assumption has become risky. On that date, Government Regulation No. 48 of 2025 on the Control of Abandoned Areas and Land (“PP 48/2025”) took effect, replacing Government Regulation No. 20 of 2021 on the Control of Abandoned Areas and Land (“PP 20/2021”). The General Elucidation of PP 48/2025 itself states that the earlier regulation could not be implemented effectively. The new regulation was made so that control measures actually take place, which signals a firmer direction of enforcement.
The legal basis has long existed. Articles 27, 34, and 40 of Law No. 5 of 1960 on Basic Agrarian Principles (“UUPA”) provide that land rights are extinguished if the land is abandoned. Article 3 of PP 48/2025 requires rights holders to develop, utilize, and maintain their land in line with its social function, and to report on this periodically. For HGB, rights of use (hak pakai), and management rights (Hak Pengelolaan), Article 6 paragraph (3) provides that land may become subject to control if it is intentionally left undeveloped, unused, or unutilized, at the earliest two years after the right was issued. Article 6 paragraph (4) applies the same rule to HGU. Two years is the earliest point at which the land may be examined, not a safe period. Article 47 also confirms that land not yet proposed for designation as abandoned before PP 48/2025 took effect will be processed under the new regulation. This means that land left vacant for years may already fall within the scope of the new regulation, without any additional transition period. Initial information can also come from many directions, because Article 10 paragraph (3) lists as sources the rights holder, monitoring by the Land Office, ministries or agencies, regional governments, and even members of the public.
Suppose a foreign-owned limited liability company (“PT PMA”) buys HGB land for a factory, then postpones construction while waiting for funding. Two years later, the land is still vacant. The land can then be entered in the list of land indicated as abandoned without prior notice.
The subsequent procedure, however, can move quickly. The committee formed by the BPN Regional Office evaluates the land within 12 calendar days. If abandonment is found, the rights holder is given a maximum of 30 calendar days to begin utilizing the land. If nothing changes, three written warnings are issued, each with a period of 14 calendar days, and no later than six days afterward the Regional Office proposes the designation to the Minister. In total, the process takes about 90 calendar days. Notices to legal entities are sent to the address recorded in the Ministry of Law’s legal entity administration system and announced on the Ministry’s website and in the mass media. A company that has not updated its address may miss the very letter that decides the fate of its right.
The regulation does, however, recognize circumstances in which the failure to use the land may not be considered intentional. The Elucidation to Article 6 paragraph (2) states that the element of intent is not met, for example, when the land is the subject of a court case, cannot be used because of a change in spatial planning, is designated as a conservation area, or is affected by force majeure. However, these grounds must be supported by documents, and they must be raised while the evaluation is under way. With a window that short, preparing evidence only after the letter arrives is often too late.
The risk even arises before designation. Under Article 28, once land is proposed for designation as Abandoned Land, no legal acts may be carried out on that parcel until the Minister’s decision is issued. The Elucidation lists the transfer of rights, extension, renewal, and the creation of security rights (hak tanggungan) as examples. A sale, an extension of the right, or the disbursement of credit secured by that land can be halted immediately. A prospective buyer should therefore verify whether any proposal to designate the land as abandoned is pending before proceeding with the transaction.
If the designation is issued, Article 30 provides that the land right is extinguished, the legal relationship is severed, and the land becomes state land formerly designated as Abandoned Land. Under Article 32, the former rights holder must vacate the land within 30 days, and anything left behind becomes abandoned property. The land may then become an asset of the Land Bank or General State Land Reserve (Tanah Cadangan Umum Negara) under Article 35. An objection to the designation may be filed under Article 33, but restoring a right that has already been extinguished is far harder than retaining it.
If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.
Author:
Dewi Susanti