Warning: Apartment Ownership Could Lead to Disputes if HGB Land Rights Expire

Prospective apartment or condominium buyers are advised not only to check the presence of the Certificate of Ownership for Individual Units (SHMSRS) but also to understand the status of the land rights on which the building stands. Understanding land status is crucial as not all land rights used for apartment or condominium construction are permanent. Shamy Ardian, Head of the Bureau of Public Relations and Protocol at the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN), said: ‘In some buildings, land status may be Right to Build (HGB), Management Rights, or other land rights with a specific term that require extension under applicable regulations.’ Regulations regarding condominium land status are governed by Law No. 20 of 2011 on Condominiums. Article 17 states that condominiums may be built on land with Ownership Rights, Right to Build, or Right to Use over state land, as well as Right to Build or Right to Use over Management Rights. In addition to land status, the public must ensure the existence of an active and legitimate Residents’ Association for Individual Units (P3SRS). The organisation represents the interests of owners and residents in matters concerning the management and legal status of the condominium. The presence of a P3SRS is particularly important when handling administrative matters related to common land, including extensions of the land rights underlying the condominium. If a condominium lacks a P3SRS and the land rights term expires, unit owners may face various administrative issues. Issues may include difficulties in selling units, obstacles when mortgaging to financial institutions, and potential future conflicts. Therefore, those intending to purchase an apartment or condominium are advised to thoroughly verify the building’s legal status, not just the SHMSRS, but also the land rights and the existence of a P3SRS. By understanding these legal aspects, owners and prospective residents can secure better legal certainty for their units and avoid potential administrative issues in the future.