The Three Primary Land Rights: Standard To Understand Basic Agrarian Law

To understand Basic Indonesian Agrarian Law, a thorough look into the rights that are required to possess the capacity of owning / using lands is required. As such, various land rights exist and therefore determine the capacity an individual might possess. In this article, we will discuss the three primary land rights that are commonly required to proceed with the procurement of land.

Right of Land Ownership

 

What is the Right of Land Ownership?

The Right of Land Ownership is the strongest and fullest right upon land which one may hold due to its hereditary characteristic. It is one of the primary land rights which entails it can be owned or controlled directly by persons or legal entities that holds a long period of said ownership and can be transferred and be transferred to another party. Regardless of these characteristics, it does not mean that the right of ownership can only be gained through hereditary means. Other ways to procure such right can be gained through:

1. Customary Law
2. Determination of the Government as in accordance with the established methods and requirements; and
3. Provisions of the law in accordance with Regulation of the Government.

1. Law Number 5 of 1960 on Basic Agrarian Principles (“UUPA”), Article 4 (2)
2. Ibid. Article 20
3. Ibid. Article 20;  H. M. Arba, Hukum Agraria Indonesia, 2016, p. 97, 216
4. Juosfiel Sadpri Pansariang, Proses dan Syarat Untuk Memperoleh Hak Milik Atas Tanah di Indonesia, Lex Privatum, Vol.II No. 3, 2014, 29

Who possesses the Right of Ownership?

1. Indonesian citizens; and
2. Legal entities determined by the Government.

Can the RIght of Land Ownership be removed?

The right of land ownership can be abolished  in cases where:

1. The land fall to the State due to:

1. The revocation of rights;

This occurs in account of the public interest of the nation and the state as well as the common interest of the people. Its revocation process occurs by providing proper compensation and is conducted in accordance with the method regulated by law,

1. Voluntary surrendered by the owner;
2. The land is being abandoned;
3. The provisions of article 21 paragraph (3) and article 26 paragraph (2) UUPA, which entails as below:

In cases where: 

• Indonesian citizens who have ownership rights and after the enforcement of UUPA lose their citizenship; 
• Foreign citizens who acquire a right of ownership due to inheritance without a will or mixing of assets due to marriage; as well as 

Foreign citizens (whether those who have foreign citizenship or those who in addition to their Indonesian citizenship has foreign citizenship), or legal entities that are not stipulated by the Government acquire land through sale and purchase, exchange, grant, testamentary gift and other actions intended to directly or indirectly transfer right of ownership will be considered null and void by law and the land falls to the state.

5. Ibid. Article 27
6. Ibid. Articles 21

In such cases, subjects of the categories above must relinquish said rights within a period of one year after the events mentioned occured. After said period, the right of ownership is relinquished and consequently this right shall be abolished by law and the land falls to the State provided that the rights of the other parties are considered.

1. The land is destroyed.

Right to Cultivate

What is Right to Cultivate? 

The Right to Cultivate is the right to work on land directly controlled by the State that can be transferred or waived to another party. The right occurs due to the stipulation of the Government, thus it is not hereditary in nature. This right provides the owner the capacity to acquire the Right to Use title (Sertifikat Hak Pakai) that can last for a maximum period of 25 years and a period of 35 years for agricultural, fishery or animal husbandry companies. An additional period of 25 years shall be granted upon request of the right holder and having regard to the circumstances of the company. The Right to Cultivate is granted on land which encompasses an area of at least 5 hectares, on the condition that if the area of the land is 25 hectares or more, the owner of the right must adopt adequate capital investment and good corporate management techniques.

Similar to the provisions of the Right of Ownership, the Right to Cultivate may be granted to Indonesian citizens as well as legal entities that are established under Indonesian law and domiciled in Indonesia. Likewise, a person or legal entity that hold or have acquired such right which no longer fulfils the conditions applied to them are obligated to relinquish or transfer the right to other parties which fulfil the conditions within a period of one year. In cases where the right to cultivate is not relinquished or transferred within the said period, the right shall be abolished due to law.

What can the holder of the Right-to-Cultivate do?

In accordance with Article 29 of Governmental Regulation No 18 of 2021 on Right-to-Manage, Land Titles, Multistory Housing Units, and Land Registrations (“Governmental Regulation 18/2021”), the Right-to-Cultivate holder is entitled to: 

1. Use and utilize the granted Land in accordance with its designation and requirements as stipulated in the decision and agreement of its granting;
2. Utilize water sources and other natural resources on the granted Land with the right-to-cultivate insofar to support the Land use and utilization in accordance with provisions of laws and regulations; and/or
3. Carry out legal acts that are aimed to waive, transfer, and amend its utilization, as well as encumber with mortgage rights in accordance with provisions of laws and regulations.

Who possesses the Right to Cultivate?

1. Indonesian citizens; and
2. Legal entities established under Indonesian law and domiciled in Indonesia

Can the RIght to Cultivate be abolished?

The Right to Cultivate can and will be abolished if:

1. The period has expired;
2. Termination before its period has expired due to a certain requirement is not fulfilled;
3. Relinquishment by the right holder before its period has expired;
4. Revocation in the interests of the public;
5. Being abandoned;
6. The land is destroyed;
7. A person or legal entity that hold a right to cultivate and no longer fulfils the conditions (referred in Art 30 (2)).

8. Ibid. Article 34

Right to Build

What is the Right to Build?

The Right to Build is a right to construct and possess buildings on land which is not their own for a maximum period of 30 years and may be transfer and be transferred to another party. It has similar provision to the the Right to Cultivate in which, upon request of the right holder and in view of the needs and of the condition of the buildings, the primary period of 30 years may be extended for a maximum period of 20 years. However, depending on the criteria of land the building is built upon the maximum and additional period differ. Provisions in Article 37 of Governmental Regulation 18/2021 states: 

1. The right-to-build on State Land and the Right-to-Manage Land shall be granted for a maximum period of 30 years, extended for a maximum period of 20 years, and renewed for a maximum period of 30 years.
2. The right-to-build on freehold title Land shall be granted for a maximum period of 30 years and may be renewed with a deed of granting of the right-to-build over the freehold title

The Right to Build occurs on two conditions: (1) on land directly controlled by the State; due to Government stipulation; and (2) on owned land; due to an authentic agreement between the owner of the land concerned and the party who will obtain the right to use, with the intent to give rise to said right.

Note: Further look into our articles about Lland Titles on our website to gain better insight about the various Titles and its Usages. 

Who possesses the RIght to Build?

Subjects that have the capacity to posses the RIght to Build, include: 

1. Indonesian citizens;

Legal entity established under Indonesian law and domiciled in Indonesia.

9. Ibid. Article 37

What can the Holder of the Right-to-Build Title do?

Again basing from provisions in Governmental Regulation 18/2021, specifically in Article 44. The holder of the Right-to-Build Title is granted to: 

1. Use and utilize the Land in accordance with its designation and requirements as stipulated in the decision and agreement of its granting;
2. Build and own buildings on the Land that is granted with the right-to-build insofar that it is for personal purposes and/or support the business in accordance with provisions of laws and regulations; and/or
3. Carry out legal acts that are aimed to waive, transfer, and amend its utilization, as well as encumber with mortgage rights in accordance with provisions of laws and regulations

Can the RIght to Build be abolished?

The Right to Build will be abolished in cases: 

1. The period has expired;
2. Termination before its period has expired due to a certain requirement is not fulfilled;
3. Relinquishment by the right holder before its period has expired;
4. Revocation in the interests of the public;
5. Being abandoned;
6. The land is destroyed; and
7. In case where any person or legal entity that owns the right to build no longer fulfils the requirements. The owner must relinquish or transfer said right to another party who fulfils the requirements within a period of 1 year and if fail to do so, the right is abolished due to law, provided that the rights of the other parties are considered.

Conclusion

This concludes the basic overview of the primary land rights that are commonly required in understanding the Basic Agrarian Principle. That said, there are various other rights that encompass further ranges of capacity. Follow our social media and websites to stay updated on our articles. 

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