Hak Milik Strata Title

Chiron

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With regards to a WNA purchasing housing in Indonesia, and being able to have the title in his/her name, it's my understanding that the only possibility is through a "Hak Milik Strata" title. Generally speaking, these are apartment-like flats, or the so called "condotel". They are often in high-rise or mid-rise buildings, and the actual unit that a WNA would own is not connected to land (tanah) in any way.

Over the past few years I've looked at several of these types of properties with the Strata title, and was not overly impressed with value proposition. In some cases, they have been insanely over priced for the Rupiah-to-Square Meter ratio. They also often come with a hefty monthly/annual estate management fee. I also have had nagging concerns about future upkeep, and other unexpected issues that would be out of your control.

All that said, I may have found something that could work for my wife and I as a transitional property to live in as we figure out what our permanent plans would be. We could either sell it later, or just keep it as a rental property down the road. So my wife is a WNI, who still has Indonesian citizenship/passport, and I'm the WNA in this example. The sales team in Indonesia is telling me that both of our names would be on the title, and there would be absolutely no problem - as the "Status Tanah" is not "Hak Milik", but "Hak Milik Strata". As with just about everything in Indonesia, it's often not "that easy" - or at least not as the sales team may be conveying.

Currently, we're still living in the USA, however slowly but surely working towards a spousal KITAS/KITAP at some point in the future. For now, I'm still working full time in Texas, and am closing in on an early retirement package - but remain undecided on the actual date. Our thought was to get this flat, which has a good security setup, and could be left locked up for extended periods of time. My wife's family would occasionally check up on the place, and pay our monthly management fee between our trips to Indonesia. We could start the painful process of getting some of our personal effects moved to Indonesia and having a secure place to store that stuff. These are the kinds of things that the shipping container folks tell you to bring in a suitcase on a flight, and NOT in the container. It would also be a nice feeling to have a place that really feels like our little home once we get off that long plane ride, instead of a hotel - or one of the relative's places.

For the transaction, it would just be a cash deal. The selling price includes everything - PPN, BPHTB, notary, charge fees, etc. So, in theory once I pay in full, the place is ours. However, it's not fully finished. We have to pick from several final color designs, kitchen upgrades, A/Cs, water purifier, etc. These are all negotiated into the final price. So, once we pay for the place it's another 1 to 2 months before everything is ready to go. I really don't like the idea of paying anything in advance for a future deliverable, but they say this is how everyone else does business with them. In any case, I have a relative that would check on things while I'm waiting in the USA.

Thoughts or opinions are welcome here...
 

Bad_azz

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A few things... Where do you ideally want to live? In a house, in a condo/apartment?
City/ beach?

In your situation I would suggest buying your own place on land, in your wife's name. I'd think it cheaper than getting sucked into these strata places.
For the interim period- why not rent a place for a year in the area you want to live?
Do you really need to own a place here? How many weeks a year do you envisage actually being in the place?
There are lots of alternatives- as your wife is WNI. Don't be sucked into what is more or less timeshare with a twist.
 

Bad_azz

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Another few points to consider before investing in ownership (& I am sure you already have)

Natural disasters:
tsunami, earthquake, volcanic eruption, flood & landslides. I took all of these into consideration before buying our house.

How many floors are there/will there be?:
I don't think I would be comfortable living on anything that is higher than 4 floors (fire risk). A friend of mine is on the 25th floor in a block- great views, but the fire alarm went off in the night earlier this year & 25 floors is a bitch in the night in a potential emergency/panic situation.
Also, in heavily populated towers there is often a queue for the lift & a long wait. That gets old very quickly- bad enough sitting in macet in the streets without having it at the access to one's home.

The proximity to neighbours:
Don't expect to get any peace and quiet in built up locations. Hard enough for me to find it here in a village. This obviously depends on the Island/province location etc.

Tourist season:
I'm in Bandung- away from the sea & the foreigner tourist destinations- however it is a very big city & very busy with tourists all year round- there is no "tourist season" here. There might be where you choose though, how will it impact on your lifestyle?
 

lifelongexpat

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I've briefly looked into the whole thing a short while ago. The leases I've seen on apartments are for 25 years which are renewable after that period for another 25.

What would the terms be after the 25 years? The version I heard was a payment of 50% of the current market value would be required to renew the lease.

In any case, I can't say I'm wedded to the idea of property ownership here.
 

Chiron

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A few things... Where do you ideally want to live? In a house, in a condo/apartment?
City/ beach?

In your situation I would suggest buying your own place on land, in your wife's name. I'd think it cheaper than getting sucked into these strata places.
For the interim period- why not rent a place for a year in the area you want to live?
Do you really need to own a place here? How many weeks a year do you envisage actually being in the place?
There are lots of alternatives- as your wife is WNI. Don't be sucked into what is more or less timeshare with a twist.

Natural disasters:
tsunami, earthquake, volcanic eruption, flood & landslides. I took all of these into consideration before buying our house.

How many floors are there/will there be?:
I don't think I would be comfortable living on anything that is higher than 4 floors (fire risk). A friend of mine is on the 25th floor in a block- great views, but the fire alarm went off in the night earlier this year & 25 floors is a bitch in the night in a potential emergency/panic situation.
Also, in heavily populated towers there is often a queue for the lift & a long wait. That gets old very quickly- bad enough sitting in macet in the streets without having it at the access to one's home.

The proximity to neighbours:
Don't expect to get any peace and quiet in built up locations. Hard enough for me to find it here in a village. This obviously depends on the Island/province location etc.
Very good comments here B/A - you're definitely inside my mind on this one!

As for the ideal place, it's really a compromise of what's important to my wife, and what will actually work for our near term realities. Retirement for me will likely be a drawn out process. When I finally "retire", it will most likely be a semi-retirement with a business travel component for consulting. During this time, I would also like to vacation travel around Indonesia, and other countries within a 2-8 hour flying distance. So the ideal location is in my wife's home town, but convenient to the airport. The ideal setup is one that I can leave my place unattended for days or maybe weeks. Eventually all this will slow down. I'll go into full retirement, and want to have a typical house. There's a completely different thought process on that...

All of the things you've mentioned are valid. This is in the Solo area, so earthquakes and volcano eruptions are on the list. This is an eleven floor building, with 184 units. Eight floors actually have condos, the other three are common areas. Yes, the elevator shaft is only showing two elevator cars, so that was noted. Fire is a concern, and that's something new to my list - thanks for pointing that out. I have considered the noise factor, and there's no getting away from that. In general Indonesia tends to be kind of noisy as a rule. However, in this case I may be sleeping at this place about 50% of the time. It will be somewhat of a base of operations for different purposes. Hiking mountains this week, going to Singapore the next. I could keep my backpacks and business suits in one place. If my wife can't go, she's 15 minutes away from her family house. With some thought towards noise mitigation, I'm looking at the large 3br units on the corner (one per floor). It's laid out where you have the minimum surface connections to the adjacent units I wanted to be on the very top floor and my wife wants the one closest to earth. We haven't worked through this one yet. The top floor will have less mosquitos, but if you want to use the stairs (instead of the elevator), the lowest unit would be ideal for that. With potential fires and earthquakes to consider, maybe my wife will win this one.

As a side note I have considered renting during this time. Every rental expedition I've gone out on has ended up being a disappointment - especially for my wife. It was actually my wife's best friend who brought this Strata development to our attention. Initially I was not interested, but quickly found this to be a nice setup. The cost is actually reasonable for my budget. Once we're done using it for 2-3 years, the place could be rented out for an income stream - although I doubt if we'll ever realize a positive ROI. Depending on the rental model, we could also use it for friends and family coming over to Indonesia to visit us. The idea would be something like Airbnb, or other daily rental models. If someone was coming to visit us, we could block out that time. With a free place to stay, my kids could find this quite popular. It's one of of those "be careful what you wish for..."

BTW @lifelongexpat - this property is a Freehold Strata Title, and is indefinite (i.e. for the life of the building) - which I hope is more than 25 years.

That said, it's not exactly like a timeshare - as it's yours all the time. You're really just buying an apartment with amenities. The twist is that there is a management fee. In this case, it's about Rp. 650.000/month. For that you get 24 security with RFID access and camera surveillance, swimming pool on the very top, sky bar, and nicely equipped gym. They also have a mini-mart, fast food, and restaurant food in the sky bar. One big issue is with laundry, as there are no facilities. However, they do have a housekeeping staff that will do laundry or clean your apartment for an extra charge. They market this place to the "busy jet-setter" who doesn't have time to clean up or do laundry. I actually like doing my own laundry, and don't mind cleaning my own place - so this was not a selling point for me.

As a final note, we haven't fully decided to do this yet. As with any big purchase, we're up and down each day, and not really sure it's an optimal solution. There are many unknowns, and that can either work for or against you - depending how things unfold into the future.
 
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Bad_azz

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Fire is a concern, and that's something new to my list - thanks for pointing that out.
Oops, sorry.
Greenfell Tower brings fire hazards to the forefront of my mind (that & the fact that my old dad was a fire prevention officer). If such a disaster can happen in the UK... then I wouldn't rest easy here considering the lack of regulation/the corruption for getting regulations passed... etc.
I have no clue whatsoever about Solo, so I cannot help you there.
What I do though is own my house in the sticks, and have someone there all the time. It is never left empty. If I am working away from home, I rent a room near to work. It works out for the best for me & the hubby.
I have seen some pretty plots of land for sale on one of the other islands, so I am now trying to salt away enough to buy there. Hubby isn't greedy but is set against selling our house & moving, he wants both -typical!
We bought pretty smart as it turns out because our little plot is now worth 2.5M or so I'm told (when our renovations are finished). Not bad for an initial buy of 345 juta 4 years ago.


So to sum up, I would suggest the best return on your cash is to buy a house (/ plot of land & build a place- you probably won't want the hassle of building). Somewhere that has staff quarters, find a really lovely employee & leave them home to look after the place whilst you wander off exploring. & while your investment grows. You will still have service charges in the format of paying someone to housekeep, but the charges also take care of the laundry ;)
You also get your own space with no-one above or below you & can grab a cab or walk to the nearest bar/ restaurant. If you buy in a good location you can sit out in your own garden & watch the wildlife/ sunsets etc.
As for mozzies- let me know when you come up with a solution to be rid, ants too- I hate ants in my food... & spiders, we have big ones.. & snakes... I'll quit now :D haha
 
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john madden

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You may need to enquire about what in Australia is called the "sinking fund" and body corporate fees. If you are unfamiliar with the terms have a Google.
 

Chiron

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You may need to enquire about what in Australia is called the "sinking fund" and body corporate fees. If you are unfamiliar with the terms have a Google.
To that point, I actually haven't had a chance to review the details of the contract. These are almost always in Bahasa Indonesia legalese, and a real joy to decipher. I have enough trouble with legal jargon in the US. The things I'm sure to find are the estate management fees can be increased at will - which is almost guaranteed after some time. However, thanks for this important detail. I'll be sure to keep my eyes open for clauses that allow for various funds that can be created, and require all the owners to contribute.

The developer is telling me that for the first three years they have what amounts to a warranty period. They will fix things in the unit, and things that affect you from the outside (e.g. leaks, electrical, etc.). After that, it's not clear what process is in place. It may be wise to get an insurance policy. However, if they have a major earthquake and the building sustains serious damage, I'm guessing whether you have insurance or not there could be a total loss.

The other thing I keep thinking about is waste water and sewage. I've been in several Indonesian buildings that experience backed up or slow drainage. Finally, one unpleasant thing I've noticed in some multi-story buildings (mostly from my travels in Solo and Yogyakarta) is improper venting of sewer lines. This creates some unpleasant odors in the bathrooms at various times. It's mostly noticeable in middle of the night. After everyone wakes up and starts taking showers, the odors seem to go away for a while.
 

Smallworld

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..

All of the things you've mentioned are valid. This is in the Solo area, so earthquakes and volcano eruptions are on the list. This is an eleven floor building, with 184 units. Eight floors actually have condos, the other three are common areas. Yes, the elevator shaft is only showing two elevator cars, so that was noted. Fire is a concern, and that's something new to my list - thanks for pointing that out. I have considered the noise factor, and there's no getting away from that. In general Indonesia tends to be kind of noisy as a rule. However, in this case I may be sleeping at this place about 50% of the time. It will be somewhat of a base of operations for different purposes. Hiking mountains this week, going to Singapore the next. I could keep my backpacks and business suits in one place. If my wife can't go, she's 15 minutes away from her family house. With some thought towards noise mitigation, I'm looking at the large 3br units on the corner (one per floor). It's laid out where you have the minimum surface connections to the adjacent units I wanted to be on the very top floor and my wife wants the one closest to earth. We haven't worked through this one yet. The top floor will have less mosquitos, but if you want to use the stairs (instead of the elevator), the lowest unit would be ideal for that. With potential fires and earthquakes to consider, maybe my wife will win this one.

As a side note I have considered renting during this time. Every rental expedition I've gone out on has ended up being a disappointment - especially for my wife. It was actually my wife's best friend who brought this Strata development to our attention. Initially I was not interested, but quickly found this to be a nice setup. The cost is actually reasonable for my budget. Once we're done using it for 2-3 years, the place could be rented out for an income stream - although I doubt if we'll ever realize a positive ROI. Depending on the rental model, we could also use it for friends and family coming over to Indonesia to visit us. The idea would be something like Airbnb, or other daily rental models. If someone was coming to visit us, we could block out that time. With a free place to stay, my kids could find this quite popular. It's one of of those "be careful what you wish for..."

That said, it's not exactly like a timeshare - as it's yours all the time. You're really just buying an apartment with amenities. The twist is that there is a management fee. In this case, it's about Rp. 650.000/month. For that you get 24 security with RFID access and camera surveillance, swimming pool on the very top, sky bar, and nicely equipped gym. They also have a mini-mart, fast food, and restaurant food in the sky bar. One big issue is with laundry, as there are no facilities. However, they do have a housekeeping staff that will do laundry or clean your apartment for an extra charge. They market this place to the "busy jet-setter" who doesn't have time to clean up or do laundry. I actually like doing my own laundry, and don't mind cleaning my own place - so this was not a selling point for me.

As a final note, we haven't fully decided to do this yet. As with any big purchase, we're up and down each day, and not really sure it's an optimal solution. There are many unknowns, and that can either work for or against you - depending how things unfold into the future.
Couple things to mention is there is not only fire hazard but also exploding gas cylinders hazard. Now some apartments baned usage of gas (at least small 3kg cylinders). As for living in a top floor vs lowest floor.... lowest floor are close to common areas which are going to be very loud, music from gym/fitness, meeting rooms, weeding and parties playing on full volume. The most strategic are in the mid section of the building simply because you will get more often elevator. If you live on the top I imagine you will wait ages for lift to arrive and when it arrive it may be full. Indonesians tend to get in to elevator and go up and down until they will workout how elevator works or more importantly which floor they are going to. Your apartment is only about half the size of mine so maybe it will not be such an issue.

If your apartment have swimming pool on the top ... there are going to be children, guests, owners of apartments running up and down making the elevator wet, floors dirty (if there is just one unit to be rented out for the weekend).
As for laundry in our apartment they said to not dry clothes outside eg on the balcony as it doesn't looks "posh" anymore. I have virtually NO mosquitoes and free 24/day AC in a form of air circulation. Lower floors have less air circulation.

Stairs: you have to remember you will only use them in emergencies and this is for evacuation only meaning going downstairs - still easy. If your apartment is on the corner of the building you will have evac route next to your apartment (depending on your building layout). Stairs are not used to bring your daily shopping to apartment! I have never ever since I live in apartment in Indonesia experience anyone Indonesian or bule using stairs, not ever those who go to gym. It is wort to mention that the evacuation door leading to staircase can only be open from inside preventing anyone unauthorized from outside getting access to your floor which can only be accessed by security card in elevator.

If the apartment is not finished yet you may have a chance to make some changes add AC units, remove/add some partition walls adding cabin shower so the water is not going everywhere, change bits and pieces here and there.

Parking cost is separate and not included in maintenance fees. You should ask how much it will cost and how to obtain permit. You need permit to have any DIY job inside your apartment. Some parts of the apartment can only be fixed by maintenance team of the apartment eg. you want to hand this picture but you need to drill a hole.... you have to contact them first so they can check if there is no drainage pipe, electric wire ect. You will quickly learn that some parts of the building are your own responsibility to maintain as an owner and some still belong to apartment maintenance team. Eg. floor tiles popping out due to heat is not their part to fix it is yours. Leakage ... depends what kind of ....if it is from your sink they you have to fix if it is from the wall, celling they (maintenance team) will first investigate.

As for owning a house and land vs. apartment it depends mainly from things like: Can you do some small DIY jobs? Fixing houses in Indonesia is never ending story. There is always something to be done, upgraded, fixed, changed. Taking care of the garden. If I compare how many even small fixes I had in Cikarang (house) and apartment in Bandung the ratio would be like 40-50:1.
 

Smallworld

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To that point, I actually haven't had a chance to review the details of the contract. These are almost always in Bahasa Indonesia legalese, and a real joy to decipher. I have enough trouble with legal jargon in the US. The things I'm sure to find are the estate management fees can be increased at will - which is almost guaranteed after some time. However, thanks for this important detail. I'll be sure to keep my eyes open for clauses that allow for various funds that can be created, and require all the owners to contribute.
.......

The other thing I keep thinking about is waste water and sewage. I've been in several Indonesian buildings that experience backed up or slow drainage. Finally, one unpleasant thing I've noticed in some multi-story buildings (mostly from my travels in Solo and Yogyakarta) is improper venting of sewer lines. This creates some unpleasant odors in the bathrooms at various times. It's mostly noticeable in middle of the night. After everyone wakes up and starts taking showers, the odors seem to go away for a while.
Our maintenance fee changes about once a year. Some fees are scrapped some fees are added. They will always notify you what and how was replaced, what was/is the price and how they calculated.

"water and sewage": Fortunately I did not experience what you described. It would be worth to check and clean properly the drainage eg in the shower (eg. use soda api), if there is water there then no way the smell could come out. If left for longer periods you could cover the drainage, close toilet seat. It won't make that much difference for sink... I leave bathroom door always open and there is always window open in the apartment for free air circulation. I did close with aluminum foil the ventilation above main door because of the nasty smell of cooking from neighbors, sometimes they burn something, sometimes they cook God knows what.... then they open the main door to the corridor leading to elevator. Some neighbors are orang kampung and they will leave rubbish just outside their main door (not knowing where r. sampah is) on the corridor leading to get cockroaches (very rare but it happens). So it doesn't matter how posh your apartment with 5 star amnesties included are it who your neighbour is going to be and in apartment they seem to change fast. Students once a year, professionals once every 2-3 years. You also don't know "those people next door" in an apartment vs a house complex ... you know who they are.
 

Chiron

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If your apartment have swimming pool on the top ... there are going to be children, guests, owners of apartments running up and down making the elevator wet, floors dirty (if there is just one unit to be rented out for the weekend).
Yes, this also has a roof top pool.

I have virtually NO mosquitoes and free 24/day AC in a form of air circulation. Lower floors have less air circulation.
In this case, the highest floor would be the 11th floor. Mid-section would be 5, 6, or 7. Something worth noting - as I'm definitely a mosquito magnet.

If the apartment is not finished yet you may have a chance to make some changes add AC units, remove/add some partition walls adding cabin shower so the water is not going everywhere, change bits and pieces here and there.
Thanks for all the great information! Very helpful.
 

Davita

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One of the problems in Indonesia is the size of the shower/floor drain tube They use a small circular drain with a channel which fills with water and an upside down cup which, when closed, maintains the water seal to prevent drain smells. If not filled often the water quickly evaporates, the seal breaks, and foul-vapour comes from the drainage.

In the west we use a u-tube (I mean the plumbing variety) which contain a much larger volume of water.

When I lived in AZ our toilet water in the bowl would evaporate if not used often. I fixed that when going on holiday by raising the seat and saran-wrapping the top of the bowl...less evaporation.
 
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waarmstrong

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Just don't forget to take off the saran wrap when you get home.
 

Daniel50

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I have stayed at several apartments, in Jakarta, and they all had some smell coming from the drain, at some point. I have never considered putting Saran Wrap on the toilet bowl but have heard of it in pranks.:smile:
 

waarmstrong

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When we remodeled, traps were installed throughout. No stink so far.
 

Davita

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I have stayed at several apartments, in Jakarta, and they all had some smell coming from the drain, at some point. I have never considered putting Saran Wrap on the toilet bowl but have heard of it in pranks.:smile:
In our Jakarta apartment our maid fills those pesky drain-seals with water every day. The shower is no problem, as it is always full, but the floor drains evaporate very quickly as we don't hose the floors like many Asians do with the bidet-spray, after using the toilet.
Sealing the toilet isn't required in Indonesia like in AZ. Evaporation isn't as fast when humidity is average or high. AZ has, generally, very low humidity.
 

Daniel50

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In our Jakarta apartment our maid fills those pesky drain-seals with water every day. The shower is no problem, as it is always full, but the floor drains evaporate very quickly as we don't hose the floors like many Asians do with the bidet-spray, after using the toilet.
Sealing the toilet isn't required in Indonesia like in AZ. Evaporation isn't as fast when humidity is average or high. AZ has, generally, very low humidity.
I wasn't thinking of actually using saran wrap in Jakarta:smile: I found it humorous and thought waarmstrong's thoughts were funny:heh:, but true, also. But I am sure it was effective in AZ. Also, your explanation of some Indonesian plumbing was helpful.
 
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Hi, im looking for information regarding the "Hak Pakai" title and more importantly the process of selling a property, the taxes and expenses etc involved. Thanks.
 

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