Without Valid P3SRS, Apartment Owners Face Difficulty in Securing Bank Collateral

Buying an apartment or residential building is not sufficient by merely confirming the existence of the Certificate of Individual Unit Ownership (SHMSRS). Buyers must also verify the land status on which the building stands and the presence of a valid Association of Apartment Owners and Residents (P3SRS). Understanding these aspects is crucial for legal certainty and long-term management of the residential building. According to Law No. 20 of 2011 on Residential Buildings, such structures can be built on land with ownership rights (Hak Milik), Right to Build (HGB), Right to Use of state land, or Right to Build or Use on Management Rights. This is stipulated in Article 17. ‘For apartments built on land with HGB, Management Rights, or other time-bound land rights, extensions must be made in accordance with applicable regulations,’ said Shamy Ardian, Head of the Ministry of ATR/BPN’s Bureau of Public Relations and Protocol, as reported on Sunday (31 May 2026). In addition to checking land status, buyers must ensure the active and legitimate existence of P3SRS. The organisation manages common areas, shared facilities, and communal land of the residential building. P3SRS also represents the interests of owners and residents in matters related to management and legal validity of the building, including administrative procedures concerning communal land. If an apartment or residential building lacks a P3SRS and the land rights period expires, unit owners may face administrative hurdles. These include difficulty in selling the unit, inability to use it as bank collateral, and potential future conflicts. Beyond confirming SHMSRS, buyers should verify land status and active P3SRS as part of the legal compliance of vertical housing. By fully understanding the legal aspects of residential buildings, the public can own and reside in apartments more securely, ensuring legal certainty over their assets.