Property Sector Disputes Increase, Consumer Protection Law Needs Revision

 
Kartini Laras Makmur, Jazmi Adlan Bohari
 
As the property sector grows rapidly, disputes between related parties in this sector are also increasing.  Such disputes mainly relate to fraud or breach of contract by dishonest developers.
 
This was affirmed by the National Consumer Protection Agency (BPKN), which records dozens of complaints related to property sector annually, with the Consumer Disputes Settlement Agency (BPSK) dealing with more than 20 cases per year.
 
Commenting on the issue, Widodo, Director General of Standardization and Consumer Protection (SPK) at the Ministry of Trade, said that consumers are filing complaints on property in a number of forums, both litigious and non-litigious.
 
“The complaints are submitted to many parties, so this is serious. Some of them file  complaints with the National Police, and also the House Representatives,” said Mr. Widodo in Jakarta on Wednesday.
 
Violations that have arisen,  according to Mr. Widodo, are commomly breach of contract by property developers that fail to execute the Sale and Purchase Commitment Agreement (Perjanjian Pengikatan Jual Beli – “PPJB”) in a timely manner. Other disputes also occur related to installment payments,  which is sometimes then used as an excuse by developers to unilaterally cancel agreements.
 
Mr. Widodo believes that more-complex property disputes can be solved by amending t Law No. 8 of 1999 on Consumer Protection. Such amendment is necessary as many of the current disputes cannot be solved under the existing Consumer Protection Law, and instead the parties must use the Electricity Lawand Multi-Dwelling Units Law.
 
“There are inputs from many parties and the House that wishes to revise the Consumer Protection Law,” Mr. Widodo said.
 
Ali Tranghanda, Executive Director of Indonesia Property Watch (IPW), said that it is hard to implement sanctions against dishonest developers, if there is no applicable Government regulation. He is also concerned that the Ministry of Public Housing has not taken any real action to adequately deal with this growing issue.
 
“Under the existing law, dishonest developers can be sanctioned with fines or imprisonment. However, a clear system to create deterrents for dishonest developers is yet to be established,” Mr. Tranghanda concluded.
 
(For more information on Multi-Dwelling Units Law, see ILD No. 234and Bill on Multi-Dwelling Units)
 
(hot/kc)