12 The Notaris Office

12.1 Settling the Final Terms

If the due diligence research revealed anything that affects the total price or other terms, this is the time to make adjustments to the purchase agreement with the landowner. Issues identified during the due diligence process probably have some monetary impact. The most common problem is that an off-property access road might be more expensive that you initially were told or thought. This is a good opportunity to reduce the total price for your land as compensation. The second most common problem is that you may need to compensate a neighbour or a family member to get clear title and solve long lasting problems.

There are also several other issues that may be discovered and if you already have negotiated the lowest possible price and reduced the commissions to a minimum, you may need to open up your wallet a bit more and pay a little extra money. The other option is to walk away from the deal, but set aside your emotions and think things over before taking that option. You might regret your decision and it is very common to pay a little extra at the end.

12.2 Notaris – Initiate Title Transfer

You have now reached a point where the price and terms of purchase have been met and you feel comfortable that the due diligence process has brought everything of importance up to the surface. It is finally time to formally initiate the purchase process.

For the case of buying raw land without an existing certificate, you don’t need to involve a Notaris to formally initiate the purchase process. If your partner is experienced in creating the necessary documents, that is all you actually need. Me and my wife have bought two parcels of raw land without involving a Notaris, while a friend of ours chose to hire a Notaris for their purchase of raw land. This is up to you. Typically there is no value added if your partner is experienced in creating the required documents, but you will need to pay the Notaris for the effort.

Generally your partner will give the relevant purchasing details and other legal documentation to Notaris office, or create the required documents himself like mentioned above. When involving a Notaris, it will take about a week for all the required documents to be prepared. The landowner and your partner (nominee) will sign, stamp and seal the purchase documents either at the Notaris office or at your partners house if not involving a Notaris. At the same time you may be paying all or part of the remaining money owed to the owner of the land, depending on the payment conditions that you previously negotiated.

The landowner and your nominee will execute one of the following transfer documents:

  • Akta Jual Beli (“AJB” or “Sale and Purchase Agreement”) pursuant to which 100% of the purchase price is paid
  • Perjanjian Pengikatan Jual Beli (“PPJB” or “Agreement Binding for Sale and Purchase”) pursuant to which a deposit is paid subject to payment of the balance of the purchase price

12.3 Sign the Nominee Agreement

By now you and your nominee should have agreed on the terms in your nominee agreement and it is a good time to sign and record your final nominee agreement. You should have a final nominee agreement translated into both Bahasa Indonesia and English. Actually, the nominee agreement is the only reason why you physically will need to go to the Notaris Office. The purchase documents do not require your signature or attendance, but many foreign investors prefer to go along as an observer. It is also a good opportunity to document the payment.

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