Property Due Diligence in Lombok

Conducting Property due diligence is a must before buying land in Lombok or any other regions in Indonesia. Land is not only essential to most kind of businesses, especially tourism related business such as hotel, villa, real estate and restaurant, but it is also often the source of conflict and dispute at the same time.

Conflict and dispute may arise among family members, neighbors, and due to laws and bylaws. Therefore, proper property due diligence is required right after you are sure that you want to close the deal.

Below, Wirajagat & Partners had summarized 5 essential things for you to check during the property due diligence before proceeding to the next steps.

1. Ownership Document

There are various types of land ownership document in Lombok. The highest and the safest one is certificate of ownership issued by Land Office. Land certificate issued for individual is normally under Freehold Title. Make sure the land is properly registered and free from mortgage and claim of any other parties.

2. Land & Building Taxes

Under the law, all land and building are subject to annual property tax. The tax rate may vary from one zone to another. Failure to prove that the tax has been paid will hinder the process of property transfer and the rest of interrelated processes.

3. Land Zoning

Some zones are intended for commercial purposes like tourism and some others for agriculture, residency and industry etc. There are also land which is part of the preservation (forest) zone. Make sure you buying the right land for the right purposes or it’s convertible the intended use.

4. Land Boundary

It is sometimes necessary to measure the land size to check that the size declared by the owner or shown by the document matches the real land size. The size on the document and the real size may differ due to various causes: mistakes, overlap, erosion etc. It’s recommended to check the size using formal Land Office officials.

5. Public Infrastructure

It’s essential to ensure that all basic infrastructure is within reach. Power line is available for connection and water sources is sufficient. Last but not least, the land is accessible through a public, shared or private road.