Overview

Between 2018 and 2020, the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (“Ministry”) recorded 8,625 land disputes in Indonesia. These disputes often relate to unlawful transfers of land rights.[1] Pursuant to Regulation of the Government No. 24 of 1997 on Land Registrations (“Regulation 24/1997”), transfers of land rights through sale and purchase, exchange, grant, inbreng and other legal actions relating to rights transfers (with the exception of auctions) can only be registered if said transfers are proven through deeds that are drawn up by authorized land-deed officials (pejabat pembuat akta tanah – “PPAT”) in accordance with the relevant laws and regulations.[2] However, in this regard, it is important to note that Decision of the Supreme Court on Judicial Review No. 78 PK/PDT/1984 (“Decision 78/1984”) ruled that a notarial deed which is substantially drawn up for “a loan agreement for money with land/house collateral” but which is classified as a land sale-purchase agreement with the right to buy back (koop en verkoop met recht van wederinkoop) and which is followed by the drawing up of an “absolute power of attorney” (onherroepelijk volmacht) to be used to transfer land rights from the relevant debtor to the creditor is considered to be a “pretended agreement” (perjanjian semu/perjanjian pura-pura), as said agreement should instead be classified as a “debt guaranteed agreement”.[3]