Before jumping into buying a piece of land in Bali, or anywhere else in Indonesia for that matter, you must conduct land due diligence to at least determine that the land seller is the legal owner and has the sole selling rights. We tell you why.
Bali has long been a desirable destination for many foreigners to buy land and settle down for good in Indonesia. However, buying a piece of land in Bali means that you will also have to face certain legal risks. Many unforeseen issues can arise and may turn your dream of land acquisition Bali into an ordeal.
Most foreigners encounter some common problems while buying land in Bali: land use restrictions, eviction issues, legal owner issues, unnecessary hidden fees, etc.
In this article, you will read more about the things you need to validate in your due diligence before closing a land acquisition deal in Bali.
BUYING LAND IN BALI OR LOMBOK: WHAT TO VALIDATE
1. Rightful Owner with Valid Certificate
First of all, you must ensure that the person who is selling you the land is the correct landowner.
Then, you need to identify their truthfulness by asking the landowner to show the updated and valid land certificate; or you can also check the inheritance documents.
2. Tax Payments
One of the most critical parts for land acquisition in Bali is to know whether the former owner has paid their land taxes before you finish the transaction.
Unpaid taxes means that you are not allowed to apply for building permit IMB in Bali unless you settle the payments.
3. Zoning Verification
Under Bali’s zoning regulations, commercial activities are actually prohibited on some areas of the island. Therefore, your land could be useless if you have the wrong zoning for your business activities.
4. Building Permit
If there is a building on the land you are going to buy, you must also make sure that you possess the building permit IMB. To avoid any litigations, the building’s classification and function must all be in compliance with the zoning laws in Bali.
Buildings that do not meet the zoning requirements or do not have an IMB will be demolished by the government.
5. Land Infrastructure and Land Border
It is important to determine the land’s actual size as well as whether there are any overlapping property boundaries with due diligence. This gives you confirmation regarding your land transaction integrity. A tiny overlapping unit can eventually give rise to disputes between the two parties: the landowners and their neighbours.
In addition to that, expats are encouraged to check the legality of an access road because some access roads may be privately owned or publicly owned by the local community. This condition can also affect the value of your purchased property.
6. Limited Property Access
In Bali, it is common that foreigners who purchase a villa will also get usage permission of road access from the previous owner who possesses the land linked to the foreigner’s purchased villa.
However, after some time, the landowner may change their mind and would want to collect fees from foreigners for using their land as road access. This can quickly lead to disputes and maybe costly court cases. Thus, foreigners need to know beforehand that the road access comes as “free” is not actually free.
DUE DILIGENCE WITH BuildBali
It is essential to have a clear understanding of your land acquisitions in Bali. BuildBali offers quality due diligence that will help you gain insights of the land value and potential issues, giving you confidence in making a final decision for closing a deal.
As a leading land due diligence service provider in Indonesia, BuildBali’s due diligence team is made up of highly-trained examiners to provide you with detailed analysis of all pertinent aspects for land transaction and ownership. Let our experienced team assist you in buying your prospective land in Bali before making a huge commitment.