Cases of Nominees (sample #1)

Here are some samples of nominee cases those happened in Indonesia those harm investor / expatriate those buy land / property with nominee system or nominee solutions.

• Mister B, a USA citizen bought a land as much US$ 2.000.000,- in the name of his beloved Javanese girl friend in 1999 for the land in Pecatu, Bali. In 2000 they got married and make an agreement that the land will be inherited to their children in Notary Office. They have 2 children and their children have Indonesian Citizen. In 2004 they are divorced and Mister B could not claim the land because the land is hold by his wife Mrs C with freehold. In 2005 Mrs C sold the land and enjoy all the money without watching the agreement that they made in Notary. In 2006 until today Mr B claim the land in the court and bloc the certificate in the Land Department based on the agreement that they made in Notary that the land belong to their children but he lost. 

Mistakes those Mr B made for the case above:

1. Mr. B mixed his business with his feeling of love to Mrs C and blind with love by put 100% of his money in the name of his love without thinking of the future or possibilities those could be happened in the future. 
2. Mr. B did not make a pre-nuptial agreement that contents all the property is not mixed although they got married, by this way indeed Mr. B can prevent the problem by make a new agreement about the property although they got married. 
3. Mr. B does not make any agreement that could hold the land in order to Mrs C could not sell the land to the other party in this case he does not make a mortgage agreement that value as much as the price of the land. This agreement is not made cause Mr. B made mistake by not making number 2 above that could be basic of making mortgage agreement.
4. Mr. B did not know that his wife is so smart in property business with expatriate, his wife knows that if he got married without making a pre-nuptial agreement, means that the property is also belong to his husband (expatriate) with freehold, and according to the law (Article 21: 3 UUPA or Agrarian Law) if in one year this property is not transferred to the other party, the land will be owned by the state as Tanah Negara or Land of the State.
5. Mrs C known very well about her right as her name is written in the certificate,  and has power to sell with the reason for the children interests and will have no problems in the future for all her actions as it is her reason is ruled by the law.

Solutions that could be founded by Mr. B:

1. Blocking the land in the Land Department (BPN) while disputing in front of the Court. 
2. Finding the other clue in the court where the land located if Mrs. C has sold the land with the reason of children interest has already agreed or not by the court, by proving the agreement that made in front of the notary to the court. 
3. Showing the other proofs that the money that used to buy the land is belong to Mr. B. 

Although the solutions above is not strong enough to get the money back, but by this way Mr. B have a chance to claim Mrs C by CIVIL Code or KUH Perdata by abusing the agreement that they made in Notary without informing her action to her ex-husband.

Package of agreements for Nominee's System

As written some weeks ago, there is no rule either law arranged about nominee's system for ownership of the land in Bali. Better says, nominee system is a system of abusing the law to make everything is possible although that system has many risk and weakness between the parties. To prevent either decreasing the risks of this agreement the parties who make agreement must keep their trust during the agreement is executed. 

In Nominee system, normally used some agreements where all of them have a same purpose either intention to make the property is "owned" by the expatriate as a freehold although in fact that property never to be owned by the expatriate because in the land certificate is written the name of the nominee. 

The package of the agreements those used to be "certificate" of the land are: 

• The Loan Agreement or the Debt Agreement, the other version could be The Acknowledgement of The Indebtedness that secured with guarantee. 
• The Power of Attorney to Sell (with substitution), in Indonesian Agrarian Law it is not allowed. 
• Power of Attorney to Use and To Build
• The Statement and Power of Attorney
• The Land Lease Agreement. 

Indeed all of those agreements above are useless caused those agreements are nothing for security of the ownership of the land in Indonesia by the Expatriate because all of them abuse the law (UUPA) and breaking the law (KUHPerdata or Civil Code of Indonesian). 

This package of agreement is used just to make the expatriate feel "happy" because they feel they are secured although they are never secured. This joke is used many people to make all transaction run rapidly as all people want to have what they want instantly like noodle. 

So, what is the solution for this game? 

1. If the expatriate want to invest in Indonesia, please follow the rule or the Indonesian Law, indeed the process is simple if all papers are already completed. 
2. All the process need time, better a little bit long in advance than sorry for eternally. 
3. Don't mix your business with your love, in Bali there are group of girls who always searching the expatriate to be their victim for money, they don't care with the process as their final purpose is the property and the money of the expatriate. 
4. Make a foreign company to get property securely in HGB Right, by this way no nominees needed to be the land or property holder caused all will be belong to the company.