The Risks of Purchasing Inherited Land with Uncertified Property Title Transfer
JAKARTA – Purchasing inherited land is often considered an opportunity due to its relatively lower price compared to land with certificates held directly by the owner. However, this transaction carries substantial legal risks, particularly when the certificate remains registered under the deceased’s name and has not been transferred to the heirs.
This condition means the administrative status of ownership remains unclear, even though the land has materially transferred to the heirs. The Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) has clarified the matter regarding the sale and purchase of inherited land assets.
When there is agreement to carry out the sale and purchase of inherited assets to the buyer, the process involves drawing up a Sale and Purchase Binding Agreement (PPJB) before a Notary and a Sale and Purchase Deed (AJB) before the Land Deed Official (PPAT).
Under law, the property rights of the deceased do transfer to the heirs as governed by Article 833 paragraph (1) of the Civil Code (KUHPerdata). However, in land administration, the party recognised as the rights holder is the name listed on the certificate.
As long as the title has not been transferred in accordance with Article 42 of Government Regulation (PP) Number 24 of 1997 concerning Land Registration, the Land Registry Office (Kantah) has not yet registered the heirs as the new owners.
This weakens the buyer’s position as the transaction is conducted with a party that administratively lacks the authority. Inherited land that has not been divided is the joint property of all heirs. Consequently, the sale must be carried out with the consent of all heirs.
If only one or some of the heirs sell without the approval of others, the transaction is liable to be contested and may even be cancelled. The buyer risks losing the land and the funds already paid.
In practice, the Land Deed Official (PPAT) cannot execute a sale and purchase deed if the land is purchased without the correct administrative process, and it will also be difficult to register.