The Indonesian National Land Agency (Badan Pertanahan Nasional Indonesia “BPN”) is getting itself ready to provide full services for electronic-based land registration that is available to the public. On January 12, 2021, the Ministry of Agrarian Affairs (the Ministry that supervises BPN) issued a new regulation on Electronic Land Certificate, Regulation No. 1 of 2021 (“Regulation No. 1/2021”), which came into force on the same day, to address the following key issues:
- Electronic land registration; and
- Electronic land certificates (“ELCs”).
Before Regulation No. 1/2021 was issued, the digitization process at BPN had progressed only partially. Since 2020, BPN has made available several online land-related services: (i) electronic mortgage (Hak Tanggungan) registration; (ii) issuance of land registration clearance letters (Surat Keterangan Pendaftaran Tanah / SKPT) - this letter is normally required in a land due diligence process conducted before a party would engage in in transactions involving land; and (iii) the provision of information on land values through the land-value zone (ZNT) mechanism.
Looking back, Indonesia’s land registration system was known to be problematic. Corruption and other criminal activity, such as forgery of land certificates, often occurred and hampered foreign investment in Indonesia.
Although concerns have been raised about the security of this online land registration system, as well as about online registration data security, the initiative from Indonesia’s government to digitize land registration services will hopefully resolve some of these potential issues, if the system is implemented properly.
1.Electronic Land Registration
The goal of the new system is to conduct all future land registration processes electronically, although implementation will be done in stages. Eventually, all data and land-related documents, such as scale diagrams (gambar ukur), land parcel maps (peta bidang tanah), spatial maps (peta ruang), and ELCs, will be processed and recorded electronically.
Once the online land registration process is completed, ELCs will be issued to record the land titles, ownership, or transactions, such as sale and purchase, mortgage (hak tanggungan), or grant/waqf (land bequeathed or donated for charitable purposes under Islamic law).
Subject to certain requirements set forth in Regulation No. 1/2021 and completing an application process at the BPN, hardcopies of original land certificates (issued prior to issuance of Regulation No. 1/2021) may be exchanged for ELCs. Once an application is approved, hardcopies of the original certificates will be scanned and retained in BPN’s database.
Based on Regulation No.1/2021 electronic land documents (and their printouts) are legally admissible as evidence in court.
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The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only. Readers of this article should contact an attorney to obtain advice with respect to any particular legal matter.