Primary Land Rights in Indonesia
Although the Law of the Republic of Indonesia Number 5 of 1960 regarding the Basic Provisions Concerning Fundamentals of Agrarian Affairs (the “Agrarian Law’) has been enforced for more than 55 years, many parties still does not fully aware about agrarian regulation in Indonesia.
The Indonesian Agrarian Law and prevailing regulations in Indonesia stipulates several type of land titles applicable in Indonesia. The rights and titles over the land are stipulated in many regulations, however, the main type of rights over the land are those regulated under the Indonesian Agrarian Law. Through this Article we would like to provide brief refreshment on land rights and titles specifically regulated under the Indonesian Agrarian Law.
As the basic principles of Agrarian affairs, soil, water and resources contained therein within the territory of the Republic of Indonesia are owned by the Indonesian Nation and shall be for the interest and welfare of the nation and people of Indonesia. Therefore, the State Government of the Republic of Indonesia at the highest hierarchy hold the authority to control and administer agrarian affairs in Indonesia for the interest of the Indonesian Nation.
Article 16 Paragraph (1) of the Agrarian Law stipulates several types of Land Titles and Rights over the land, namely the Right of Ownership (Hak Milik); Right to Cultivate (Hak Guna Usaha); Right To Build (Hak Guna Bangunan); Right to Use (Hak Pakai); Leasehold Right (Hak Sewa); Right of Land Clearing (Hak Membuka Tanah); and Right to Collect Forest Products (Hak Memungut Hasil Hutan). Besides, there are other rights regulated in other regulations and other rights that have temporary status.
Right of Ownership or also know as Freehold Title contains the right to use the land for any interests with no specific title validity period. The Right of Ownership only granted to Indonesian citizen with single Indonesian citizenship. Only lands with Right of Ownership can be vested under waqfs for Islamic religious , educational and ummah welfare purposes. These rights are the strongest and fullest land title applicable under the Indonesian Agrarian Law.
Right to Cultivate is the right to cultivate lands directly controlled by the State among others for farming, fishing, or livestock. The Right to Cultivate can be obtained by Indonesian individuals or Legal entities incorporated under Indonesian law (Indonesian Legal Entities). The period of this Right to Cultivate applies for 25 years for individuals and 35 years for Indonesian Legal Entity. The right can be extended for another 25 years.
Right to Build is the right to construct or to possess buildings on a land which is not one’s own for maximum 30 years and can be extended for maximum 20 years. Right to Build can be obtained by Indonesian individuals or Indonesian legal entities. The Right to Build can be granted over the State’s lands by the issuance of Government Decree or lands with Right of Ownership pursuant to an agreement with the holder of the Right of Ownership under Authentic Deed.
Rights to Use is the right to use and/or collect products from land that directly owned by the State or other people which is granted other than those right arisen due to rental agreement or land cultivation agreement. Right to Use can be granted to Indonesian citizens, foreign citizens, Indonesian legal entities, and foreign legal entities.
Leasehold Right is the right to use a parcel of land owned by other party under certain lease agreement for certain period and certain use by paying certain sum amount of money to the owner of the land as a rent. This right is a secondary title as it is given by the primary land title owner to the other party without transferring the primary title of the land to the second party.
Right of Land Clearing and Right to Collect Forest Products are rights basically rights under the customary law (hukum adat) concerning land which give the holder of the said rights to clear a parcel of land and the rights to collect resources in the forest without giving the right and title to the holder for owning the land.
From the above Land Rights, the Indonesia Agrarian Law specifically stipulated that Right of Ownership, Right to Cultivate and Right to Build granted by the State can be charged as security under Mortgage, while the Law Number 4 of 1996 regarding Mortgage Over The Land And Objects Related to the Land (the “Land Mortgage Law”) added the Right of Use over State Land which according to the prevailing regulations must be registered and in nature is transferable on the list of land rights that eligible for Mortgage.
Besides the above land rights, the Agrarian Law also stipulate Right to use Water (Hak Guna Air), Aquaculture and Aquaculture and Fishing Right (Hak Pemeliharaan dan Penangkapan Ikan); Air Space Right (Hak Guna Ruang Angkasa); and Land Rights for Religious and Social Functions (Hak-Hak Tanah untuk Keperluan Suci dan Sosial).
In brief, the Right to use Water is the right to use water resources for certain interests or to flow the water over others’ lands, while the Air Space Right is a right to use the resources and materials on the air space to maintain the fertility of soil, water, and others and the Land Rights for Religious and Social Functions are rights for land that use for religious and social interests. The Indonesian Agrarian Law further stipulates that these rights shall be regulated under the Government Regulations of the Republic of Indonesia.
Author: Thareq Akmal Hibatullah
Editor: Andry Yudistira
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