What Are the Risks of Buying Illegal Subdivision Land?

In recent years, public interest in subdivision land has continued to rise. Prices that are relatively more affordable compared to ready-to-occupy houses, along with flexibility in construction, have become the main attractions for many prospective buyers, particularly middle-income communities. This was similarly stated by Vice Chairman of the Central Board of the Indonesian Real Estate Council (DPP REI) Bambang Ekajaya, quoted by Kompas.com on Wednesday (25/3/2026). According to him, the characteristic of land, which is limited in quantity, is one of the main reasons why this asset is highly sought after by investors. “Land is God’s creation, there is no factory for it, and its quantity is limited. Therefore, its price always rises every year,” said Bambang. There are still many cases where the public is tempted by cheap prices without conducting in-depth checks on the legal status of the land. This situation has the potential to cause various problems, from ownership disputes to financial losses. Illegal subdivision land is generally not equipped with official documents such as land ownership certificates, or is located in areas that do not comply with spatial planning designations. As a result, buyers not only face legal uncertainty but also the risk of losing the asset in the future. Illegal subdivision land generally does not have official certificates such as Ownership Title Certificates (SHM) or Building Use Rights Certificates (SHGB). The documents possessed are usually not strong enough legally. Without clear legality, the land has the potential to be claimed by other parties, including the original owner. This can trigger prolonged disputes. Thus, it cannot be used to build a house legally. Processes such as certificate splitting and name transfer cannot be carried out if the land is not officially registered. This complicates the owner in managing the asset.