Bali Property Reality Check: Before You Make That Purchase

21 April 2020 by Ade
Bali Property Reality Check: Before You Make That Purchase

Purchasing a property in one of the most desired places to live is always a good idea. The property can be used as a home for your retirement, as your second home for the holidays, and even as a lucrative property business.


Like with any property purchase, you must do your due diligence research, talk to the right people, and trust only a few. Before making any purchase involving a huge amount of money, here is a reality check of what purchasing properties in Bali entails.


Land certificates - who really owns the land?


While land certifications matter for all property-related purchases, not every land certificate in Bali is up to date. There is a possibility that the landowner’s name inscribed in the certificate is no longer valid – perhaps due to death and inheritance, or unofficial selling to another owner, outside of the authorities’ knowledge.


Land law in Indonesia is straightforward, but the lack of law enforcement and people not following proper protocols for land transfers are the source of many headaches.


What to do:


When you receive information regarding the land certificate, you should ask politely how the current owner obtained the land certificate. If he or she purchased the land from someone else, try to contact the previous owner. If it is an inherited land, ask for the inheritance documentation and check with your lawyer.


At Bali Coconut Living, we always make sure that the freehold certificates certify the true owner of the land before they can list their property with us. This way, there will be no potential legal problems in the future.  


Zoning - does the land lie in the correct zone for its purpose?


The building certificate (Izin Mendirikan Bangunan or IMB) is the next crucial document that determines how your property will function, and what you are allowed to build.


As urban development spreads outwards from the centre, buying property in the heart of well-established towns can get ridiculously expensive, so you will probably consider buying ones in the rural areas not too far from the main attractions.


Some of the local people have built houses on inappropriate zones, but got away with it because their family owns the land since before the government increased their efforts to enforce the zoning law.


What to do:


Check the IMB and the local zoning law. Remember, you are not allowed to build in the Green Zone (reserved for agriculture). You are not allowed to build commercial buildings such as villas, restaurants, or hotels in residential areas. In case of a mixed zone, consult with your property advisors on what you should or should not build based on unspoken cultural laws.


Go to the site – get an accurate picture of the property


What is on paper may be difficult to imagine, and sometimes untrue of the reality on the site. The site plan or aerial view map will not account for the following inconveniences:

  • Actual land boundaries
  • Neighbourhood access
  • Road quality
  • Land quality for construction
  • Building quality
  • Flooding or fire hazards


What to do:


Ask a property agent, such as Bali Coconut Living to help with property inspection. Done with us, this can be beneficial for you as we have done research on the property beforehand. We know the ins and outs of the property, the real owner of the property, the validity of the land certificate, and we even supervise properties that are under construction.


Do note that this is not legal advice, and you should hire a property lawyer to perform additional inquiries regarding the validity of certificates – it is normal to doubt everything! Rest assured that you have mitigated unnecessary risks by talking to our agents.

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