On 12 January 2011, the Government issued the Law Number 1 of 2011 on Housing and Habitation (“Housing Law“). By the issuance of this law, the existed law on housing Number 4 of 1992 has been revoked. This new Housing Law is divided into 2 (two) parts i.e. housing and habitation. The purpose of this Housing Law is to fulfill the public needs for housing.

Housing

The new Housing Law covers planning, construction, utilization, and management stages.

Planning

The housing planning covers standard or simple houses (rumah sederhana), middle houses (rumah menengah) and/or luxury houses (rumah mewah). According to Article 24 of the new Housing Law, the housing planning shall be conducted for the following purposes:

1.create a proper house;

2.support the public needs for housing; and

3.improve the building administration and neighborhood.

The housing planning shall be made by the competent people to ensure those foregoing purposes are fulfilled. Further, the house planning shall comply with the technical, administrative, layout and ecological requirements. The developer is required to fulfill the requirements to obtain the Building Construction License (Izin Mendirikan Bangunan).

Moreover, the new Housing Law also covers the facilities, infrastructures and public utilities as the inseparable parts of housing. Under Article 28, there are some obligations for the developer to provide the following plans:

1.the lots of land as part of housing to be used by the developer to construct the facilities, infrastructures and public utilities; and

2.the facilities, infrastructures and public utilities completeness.

Construction

Pursuant to Article 32 of the Housing Law, the housing construction covers the construction of facilities, infrastructures and public utilities and also the housing quality improvement. For the construction, this regulation requires the developer to produce the environmental friendly houses which use local materials that are safe for health. Moreover, it is regulated that the materials shall comply with the standards of Indonesian National Standard (Standar Nasional Indonesia – SNI). In addition, Article 33 of the Housing Law requires the Regional Government to simplify the license issuance for the developer which will construct the standard or simple houses.

According to Article 45, it is prohibited for the developer to conduct delivery and acceptance and/or withdraw the money from the buyer more than 80% before fulfilling the following requirements:

1.land certification;

2.Building Construction Permit;

3.availability for facilities, infrastructures and public utilities; and

4.housing construction for minimum 20%.

For the construction of facilities, infrastructures and also the public utilities, the Housing Law also regulates the following requirements:

1.conformity between services capacity and number of houses;

2.integration between facilities, infrastructures, public utilities and housing environment; and

3.technical requirements for facilities, infrastructures, public utilities and housing environment construction.

Utilization

As set out in Article 48, it is stated that the housing shall be used for occupancy function. Further, it is elaborated that the occupancy function covers:

1.houses utilization;

2.facilities and infrastructures utilization;

3.houses, facilities and infrastructures preservation according to the laws.

Moreover, it is allowed to utilize the houses for business purposes as long as the activities does not endanger or cause any harm to the occupancy function.

The rights to occupy houses can be in the form of:

1.ownership; and

2.rights of lease or not lease.

Management

For the management, the Housing Law covers planning, construction, and utilization stages which will be further regulated in the government regulation.

Furthermore, the Housing Law also regulates the facilities for low income society. It is stated that the Government is obliged to fulfill the housing needs for that society which can be given in the form of:

1.subsidy for land acquisition;

2.lower tax;

3.licenses;

4.insurances and securities;

5.land acquisition;

6.land certification and/or

7.facilities, infrastructures and public utilities.

Habitation

Further, with regards to the habitation, the Housing Law regulates the implementation that covers:

1.development for existed areas;

2.new construction; or

3.re-construction.

The habitation implementation according to Article 56 (1) includes:

1.Planning. With regards to the habitation planning, the habitation must be made based on regional zoning plan.

2.Construction. For the construction, the habitation must in accordance with the plan and also the license.

3.Utilization.

On the utilization, the habitation must comply with the regional zoning plan.

1.Management. For the habitation, the Housing Law covers the same stages with the housing. Moreover, the management for planning stage will be done through the supervision for facilities, infrastructures and public utilities plans. And for construction stage will be done through the supervision of habitation quality. Moreover, for the utilization, the management can be done through incentive, disincentive and sanctions.

Land Acquisition

According to Article 106, land acquisition for housing and habitation can be obtained through:

1.granting rights of land for state land;

2.land consolidation by land owner;

3.assignment or land waiver by land owner;

4.utilization and assignment of state land or regional government owned according to the laws;

5.utilization of neglected land which is occupied by Government; and/or

6.land procurement for public purposes.

Sanctions

The sanctions for the violation of the provisions of the Housing Law, a person can be imposed with administrative sanctions and/or criminal sanctions. The administrative sanctions for the violation of the Housing Law are in the forms of:

1.Written warning;

2.Limitation for construction activities;

3.Suspension for construction activities;

4.Sealed;

5.Building demolition in specific time; and

6.Revocation of licenses.

Further, the criminal sanctions can be imposed in the form of penalties with the maximum Rp 5.000.000.000 (five billion Rupiah) and also additional sanctions to re-construct the housing.

Helen Turusia