Land rights are proven from land certificates. Land certificates are authentic proof of ownership rights or proof of land ownership. There are a number of terms that are related t land rights within land certificates, these include; HGB or building use rights. HM or Hak Milik, HGU which is the Right to cultivate and HP which is the right to use. Each of these land rights are proven by certificates as authentic evidence such as SHGB (Building rights certificate for HGB) then SHM (certificate of ownership for HM) and SHGU (certificate of entitlement for HGU).
The following is an explanation of land rights in Indonesia.
BUILDING RIGHTS
What is HGB? HBG is the right to build and own buildings on land that are not ones own with a maximum term of 30 years. However, at the request of the right holder and keeping in mind the needs and condition of the buildings, the period can be extended to a maximum of 20 years.
The right can only be granted to Indonesian citizens or legal entities established according to Indonesian law and domiciled in Indonesia. HGB can be used as a debt guarantee by being burdened with mortgage rights. This right can be transferred or transferred to another party.
Land that is directly controlled by the government can become a building use right, based on the government’s determination. Whereas, owned land can become HGB due to an authentic agreement between the landowner and the party with will obtain the HGB.
The HGB is declared no longer valid when;
- The time period is over;
- It is terminated before the time period expired because there are conditions that are not met;
- Released by the right holder before the time period expires;
- Revoked in the public interest;
- Abandoned;
- The land is destroyed; or
- A person or legal entity that had a HGB but no loner meet requirements, thus, it is obligated to relinquish or transfer its rights to another party> If not released or transferred the HGB is null and void by law r will be automatically void.
RIGHT OF OWNERSHIP
Property rights can be defined as inherited, string and fulfilled rights that can be owned by every Indonesian citizen on a land. Property rights can also be transferred to other parties. In addition, property rights can be used as a collateral for debts with mortgage rights.
Only Indonesian citizens can have this right. Specifically, for legal entities, property rights and terms of acquisition are determined by the government. The use of owned lad by non-owners is restricted and regulated by law.
Property rights are no longer stated as ownership rights when:
- The land falls to the state due to the revocation of rights resulting from the land being used for public purposes. If this is the case, there are compensation processes;
- The existence of voluntary surrender by the owner;
- The land is abandoned;
- Foreigners who obtain property rights because of inheritance without will, mixing of assets due to marriage or citizens who have other citizenship;
- The process of buying and selling, exchanging, granting, giving with a will, either directly or indirectly so that the transfer of ownership to foreigners, citizens who have other citizenship or to other legal entities; or
- The land was destroyed.
CULTIVATION RIGHTS
The definition of ‘land use rights’ , is the right to cultivate land that is directly controlled by the state for a maximum of 25 years including agricultural,. Fishery or livestock company. This right is given to land that covers an area of at least five hectares. If the area of HGU is more than 25 hectors, it must use a proper capital investment mechanism and goo corporate techniques that are adjusted to the times.
For companies that require a longer period of time, the right to use can ge given for a maximum period of 35 years. Right holders can request an extension of their rights up to 25 years.
This right can only be granted to Indonesian citizens or legal entities established according to Indonesian law and domiciled in Indonesia. HGU can be used as a debt guarantee by being burdened with mortgage rights. As with other rights, this can b transferred or transferred to other parties.
This right no longer applies when:
- The time period is over;
- Terminated before the time period expires because there are conditions that are not met;
- Released by the right holder before the time period expires;
- Revoked in the public interest;
- Abandoned
- The land is destroyed; or
- People or legal entities who have HGU’s but no longer fulfil the requirements, they are thus obligated to release or transfer their rights to other parties. If not releases or transferred, the HGU will be null and void by law or it will automatically become void.
RIGHT TO USE
Usufructuary rights are the rights to use and/or collect the proceeds from land that is directly controlled by the State or land owned by someone else, which gives the authority and obligations specified on the decision to grant it by the authorised authority or in an agreement with the landowner. This is not inclusive of a lease agreement or rent or land management agreement, everything as long as it does not conflict with the soul and provisions.
Usage rights can be granted when;
- During a certain period or as long as the and is used for certain purposes;
- Free of charge with payment or service of any kind
However, the granting of use rights may not be accompanied by conditions that lead to extortion.
Use rights can be owned by;
- Indonesian citizens;
- Foreigners domiciled in Indonesia;
- A legal entity established under Indonesian law and domiciled in Indonesia;
- A foreign legal entity that has an Indonesian representative.
The transfer of usufructuary rights to another party is controlled by the State and must be authorised by an authorised office. Whereas, the transfer of the usufructuary rights over land can only be don to another party if it is stated in the concerned agreement.
LAND RIGHTS OUTSIDE OF HGB, HGU AND HP
In addition to the land rights mentioned above, there are still a number of land rights that are also regulated in Law Number 5 of 1960. This law concerns the Basic Rules for Agrarian Principles such as; the right to rent buildings, the right to open land and collect forest products and water usage rights, maintence and fishing.
The lease rights for buildings, concerns a person or legal entity who has the right to lease land and wants to use someone else’s land for building purposes, they do so by paying rent money.
The right to open land and collects forest products can only be granted to Indonesian citizens who are regulated in a government regulation. The legally obtained rights, however, does not necessarily mean one is granted ownership of the land.
Water usage rights inclusive of maintence and fishing, are the rights to be able to obtain water for certain needs and/or drain water from someone else’s land.
Beyond that, there are still land rights that we may have heard about but are not contained in the act such as, HPL or management rights.
RIGHT TO MANAGEMENT
The definition of HPL or land management rights is a controlling right from the State. The authority of the implementation of such rights is partially delegated to the right holder to plan the designation and use the land, use the land for the purposes of carrying out its duties, hand over the parties of the land to a third party and/or cooperate with third parties.
The object of management rights is agricultural land and non-agricultural land. While the subject can be the Department, State owned Enterprises, Regional owned Enterprises, PT persons, Authority Bodies and other Government legal entities.
It is possible to grant management rights from the usage rights to foreigners provided that they are an Indonesian resident, a legal entity that has an Indonesian representative and have an Indonesian work permit granted by the ministry of labour.
The right is lost when;
- It is released by the rights holder;
- Cancelled because the land is not used in accordance with the granting if ts rights;
- Revoked in the public interest; or
- Because the term expires, if the grant is accompanied by a period of time.
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