The Ministry of Public Works and Housing has enacted Regulation No.11/PRT/M/2019 (the “Regulation”) regarding PPJB on 18 July 2019. The Regulation is applicable to sale and purchase transactions of residential real estate and properties, including private houses, private commercial houses, cluster houses, and apartment units. In the PPJB context, the term “Developer” refers to both an individual and legal entity.
The Regulation regulates PPJB transactions, which are usually entered by a developer and buyer prior to entering the Deed of Sale and Purchase Agreement (“AJB”), because the construction of the property is still underway. It contains provisions on the marketing activities and the signing of PPJB.
Marketing Activities (Before PPJB)
Single House and Cluster House:
Developer is allowed to conduct marketing activities during with the construction period.
Apartment Unit :
Developer is allowed to conduct marketing prior to the construction period.
To conduct marketing activities, the Developer needs to obtain:
Marketing Information shall contain:
Time for Signing :
PPJB is allowed to be executed after the Developer has met the following requirements:
PPJB Clauses :
PPJB shall consist, at least, the following clauses:
Condition for Signing :
Conditions for Termination :
The Regulation is designed to balance business needs and consumer protection in the real estate and property industry. The Developer must be able to market and sell their residential project before completion to acquire funding for construction. However, the Buyer should seek legal protection in the event the Developer has failed to complete the residential project in which they are investing.
Whether you are a Developer or a Buyer it is important to understand your legal rights and obligations bourne from statutes or contracts. Schinder Law Firm can advise and represent you on any legal issue related to real estate and property, either during the transaction or dispute.
About the author:
A qualified Indonesian advocate. Budhi specialises in litigation, arbitration and other contentious matters. Budhi has extensive experience in representing numerous domestic and multi-national companies before the Indonesian National Board of Arbitration (BANI) and the Indonesian courts.