LAND TENURE ACCORDING TO THE NATIONAL LAND LAW (LAW NO. 5 YEAR 1960)

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LAND TENURE

ACCORDING TO THE

NATIONAL LAND LAW

(LAW NO. 5 YEAR 1960)

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TYPES OF LAND RIGHT (Based on its Authorities)

LAND RIGHT WHICH HAS SPECIAL AUTHORITIES (which Public and Civil Right)

THE RIGHT OF THE NATION (Article 1 BAL)

THE RIGHT OF THE STATE (Article 2 BAL)

THE RIGHT OF ADAT COMMUNITY

Adat Communal Right (Ulayat) (Article 3 BAL)

LAND RIGHT WHICH HAS GENERAL AUTHORITIES (Civil Right)

INDIVIDUAL RIGHT OF LAND/ LAND TITLE

RIGHT OF LAND

SECURITY RIGHT OF LAND

(Hak Tanggungan) Law Number 4 0f 1996

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THE RIGHT OF THE NATION

26-Feb-14 Land Tenure according to the National Land Law

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THE RIGHT OF THE STATE (Article 2 BAL)

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(1) Based on the provision Article 33, paragraph (3) of the Constitution and matters meant in Article 1, the earth, water and airspace, including the natural resources, contained

therein are in the highest instance controlled by the State being and Authoritative Organization of the whole People.

(2) The rights of controlled by the State meant in clause 1 of this Articles provides authority: a. to regulate and implement the appropriation, the utilization, the reservation and the

cultivation of that earth, water and air space as mention above;

b. to determine and regulate the legal relations between persons concerning the earth, water and air space;

c. to determine and regulate the legal relations between persons and legal acts concerning the earth, water and air space.

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THE RIGHT OF ADAT COMMUNITY

Adat Communal Right (Ulayat) (Article 3 BAL)

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DESCRIPTION OF LAND RIGHTS

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Land Tenure according to the National Land Law

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1. Right of Ownership (HAK MILIK)

(1) BAL:

- Articles 20 to 27; Article 50 paragraph (1) and article 56; - Conversion provisions of Article I, II, and VII.

(2) Implementing Regulations :

- BAL-regulated in only the principal provisions, further provisions on Right of Property has not been set. As a basic law of Right of Ownership in addition to the BAL are:

- Law No. 56/Prp/1960 on Stipulation of the size of Agricultural Land; - Government Regulation No. 24 of 1997 substitute Government

Regulation No. 10 of 1961 on Land Registration;

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- Regulation of the Minister of State for Agrarian Affairs /Chairman of National Land Institution No. 9 of 1999 on Procedures for Granting and Revocation Rights and Rights of Land Management.

- Law No. 20 of 2011 on apartment regarding high rise building ;

- Regulation of the Minister of State for Agrarian Affairs /No. 1 of 2011 Head of Land Agency No. 3 of 1999, regarding Delegation of Authority The Provision of Land Rights Decision of the State which replaced the Regulation of the Minister of Home Affairs No. 6 of 1972 on Delegation of Authority Provision of granting Land Rights jo. Presidential Decree No. 26 of 1988 concerning the National Land Agency;

- Law No. 4 of 1996 on Hak Tanggungan (Security Right on the Land) upon land and other object related to the land.

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b. Definition

Hak Milik is hereditary, strongest and fullest

security land right. The word "strongest" and

"fullest

“

does not mean that the property is an

absolute right, cannot be contested and is not

limited to such

eigendom

rights, but the words

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1) Represents the strongest right, it means, Right of

Ownership is not easly removed and destroyed and easily defended against the rights of other parties, therefore, it must be registered according to the Government Regulation No. 24 of 1997.

2) The fullest, this indicates that the authority of the holder

is the fullest only limited by provisions of Article 6 of BAL on the social function of land.

3) Hereditary, then the period is not limited, can be

transferred because of legal acts and cab be inherited by legal events.

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(1) Adheres to the principle of nationalism and the principle of equality for men and women (chapter 9 BAL);

(2) The general principle: individual (Article 20 paragraph 1, BAL;

(3) Citizen of Indonesia is ithe executive of the principle of nationality as one of the basic BAL (article 21 paragraph 1, BAL;

(4) WNI Sole (Indonesia with Single Nationality). BAL consider a man with 2 of nationality (dwikewarganegaraan/bipatride) as a foreigner (Article 21 paragraph 4 BAL), because at the time when BAL is made, dual-citizenship was still applied.

(5) Specific Legal entities (article 21 paragraph 2 BAL) which based on Government Regulation No. 38 of 1963 may own Right of Ownership, namely:

a. Government banks;

b. Agricultural Cooperatives Agencies; c. Social Agencies;

d. Religious Bodies.

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1) Prohibition of transferring Right of Ownership to a foreigner,

Indonesian legal entities (except those stipulated in the Government Regulation No. 38 of 1963) and foreign legal entities (Article 26 paragraph 2 of the BAL);

2) Legal events that caused the transfer of Right of Ownership to the

parties who are not entitled to hold Hak Milik such as foreignners, but still in addition that the foreigners are not allowed to hold the right less than 1 year and must transfer it to those who is qualified.

d. Legal Issues

Legal events that led to the termination of the Right of Ownership for foreign nationality are (article 21 paragraph 3):

a. Joint property caused by mixed marriage;

b. Inheritance without a will (ab intestate inheritance);

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1) Full authority compared to the other rights, the object can be either building or farm land, for it can be used for agriculture or for building. While Building Right on Land is only for building and Right of Cultivation for agricultural, fisheries and animal husbandry.

2) Although it has full authority but still there are restrictions, which remain bound to the provisions of Master Plan (Master Plan) or a detailed plan (Detailed Plan) of the Local Government Level I, except for agricultural areas cannot be used for real estate, so vice versa.

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f. Authority of Right holder

1) Can use the land;

2) Can take the products;

3) Can performing other legal actions.

g.The nature and characteristic

1) Classified as rights that must be registered according to the

Government Regulation No. 24 of 1997;

2) May be transferred to heirs;

3) May be transferred;

4) May be granted to other people;

5) Down through the generations;

6) May be released/relinquished;

7) May be used as the sources of other land title;

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i. Occurrence

According to article 22 of the BAL, Right of Ownership occurs because:

1) Customary law, for example:

a. The opening of the Customary Land;

b. “Aanslibbing” (tongue of land).

2) Stipulation of the Government, for example:

a. Granting new rights;

b. Conversion from Right of Use (HP) to Right of Ownership (HM)

3) By Law (through the provision BAL has been converted on September 24th_{, 1960).}

h. Period

Unlimited, may be inherited.

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j. Deletion

The Right of Ownership is delited if:

1) The land becomes state land, because:

- Annulment of rights;

- Relinquished voluntarily;

- Expropriated for the public interest;

- The land is abandoned/left idle;

- The land was transferred to those who is not entitled

to hold HM.

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2. Right of Cultivation/ Exploitation

(HAK GUNA USAHA)

(1) BAL:

- Articles 28 to 34; article 50 jo. 52, section 51 and 52 - Conversion provisions of the BAL articles II, IV and VII.

(2) Implementing Regulations :

- Law No. 1 of 1967 on Foreign Investment, in particular article 14;

- Law No. 4 of 1996 on Hak Tanggungan upon Land Right and things related to the land

- Government Regulation No. 40 of 1996 on the Right of Cultivation, Right to build HGB and Right to Own Strata Land (HP);

- Government Regulation No. 24 of 1997 substitute to Government Regulation No. 10 of 1961 on Land Registration;

- Presidential Decree No. 32 of 1979 on the Principles Policy for Granting New … upon the land ex conversion of Western Right.

a. Sources of law

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- Presidential Decree No. 34 of 1992 on Land Use Right of Enterprises for Joint Venture in the Framework of Foreign Investment;

- PMNA/Ka. BPN No. 2 of 1999, on location license that replaces PMNA / Chairman of BPN No. 2 of 1993, concerning Procedures for Obtaining Permit Location and Land Rights in the Framework of Investment Companies;

- Regulation of the Minister of State for Agrarian Affairs / Head of Land Agency No. 3 of 1999, regarding Delegation of Authority the Provision of Land Rights decision that replaces the State Domestic No. 6 of 1972 on Delegation of Authority Provision of Land Rights jo. Presidential Decree. No. 26 of 1988 concerning the National Land Agency.

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b. Definition

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C. The Nature and Characteristic

1) Classified as rights that must be registered according to

the Government Regulation No. 24 of 1997;

2) May be transferred to heirs;

3) May be transferred;

4) Duration time is limited;

5) Can be released by the right holders;

6) Can be used as collateral for loans with Hak

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d. Period

1) Tree crops: 35 years and can be extended 25 years longer can be renewed accordingly;

2) Young plants, animal husbandry and fishery : 25 years and can be extended another 25 years.

Terms and conditions for apllying the extension and renewal of right to till

or right of exploitation:

1) The land is still cultivated properly in accordance with the circumstances, the nature and purpose of granting such rights;

2) The terms of such entitlements are met well by the right holder; 3) Holders of right is still qualified as a concession holder;

4) Proposed is not later than two years prior the expiration of the concession period.

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(1) An Indonesian citizen;

(2) Indonesian Legal Entities including a limited liability

company established under the foreign investment law.

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1) Pay official cost to the State revenue;

2) Conduct the business of agriculture in a wide sense including plantation,

fishery and/or animal husbandry according to the designation and the requirements as stipulated in decree of granting the title;

3) Using its own land in accordance with terms of business feasibility and

criteria required by the technical agencies;

4) Construct and maintain surroundings infrastructure and facilities that exist in

the area of the land;

5) Maintain soil fertility, prevent damage to natural resources and preserve

the ability of the environment in accordance with laws and regulations;

6) File a written report on each end of the year on the use of the right;

7) Submit the return of land granted by the State after the annulment of the

right;

8) Submit certificates of the annulment right to the Head of the Land Office.

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HGU holders are entitled to:

1) Control and use their land to conduct business in the fields of

agriculture, fisheries and/or animal husbandry;

2) Control and use of water resources and other natural resources on

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1) Minimum 5 hectares (chapter 28 BAL jo. Article 5 of

Government Regulation No. 40 of 1996);

2) Maximum:

• For individuals: 25 hectares;

• For the legal entity: determined by the Minister of

Agrarian affairs (recently BPN) with consideration of the competent authority and the size of land required for the business.

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 If the origin of land is State land, then the occurrence is

through a rights application;

 If coming from land that has been taken with certain

rights, must first make relinquishment and followed by petition of right. If on the land granted consist plants and/or building owned by another party with the wrong title, the new concession holder must pay compensation.

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(1) Sale and purchase; (2) Exchange trade;

(3) Investment in capital in a legal entity; (4) Grant;

(5) Inheritance.

The transfer of HGU must be registered at the Land Office. The transition for purchase except through auction, exchange, investments in capital and grants is made by deed of PPAT. While transaction through auction is evidenced by the Minutes of Auction, and the transition due to inheritance is evidenced by a will or inheritance certificate made by the relevant authorities.

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(1) The term is ended;

(2) Cancelled because the requirements are not met by the holder;

(3) Released on a voluntaryily by the holders of their right prior to the end of the term;

(4) Revoked for the public interest (Law No. 20 of 1961); (5) The land is abandoned;

(6) The land is destroyed;

(7) Holders of right do not meet the qualification as the right holder.