Categorized | Business/Property

Zoning Regulations

By: Terje Nilsen

Zoning Regulations - Sunrise in Bali

In Bali there are no parking problems, you can park anywhere you want.
In Bali there are no zoning regulations, you can build anywhere you want.
Not true.

Zoning regulations are a hot topic these days in Bali. Land is zoned under many different categories, most starting off as agriculture land, developing into different stages of land to develop real estate, tourism areas, commercial, governmental buildings and others.

Earlier locals constructing houses for their own residential purposes in their respective areas of origin did not need an IMB (building permit). This set a presidency also for some expats to do the same, thinking this was allowed.

Also foreigners wanting to build on rice fields could do so by drying the land and having a survey team come along. The government would then conclude that the land was no longer used for agriculture, therefore allowing construction to take place.

The same principals would be used with regards to the set back on the beach being 100 metres from high tide. Same rules, a somewhat shorter distance applies also for rivers and Subak water systems. A breach of this regulation would be that it was in the interest of the public to allow resorts and villas to be built closer to the beach, and in some cases this is true, but far from all the areas where it has happened. Or one could consider to build the main building behind the 100 metre set back and then build “semi” permanent buildings closer to the beach. This would include pools, Joglos, and other kind of buildings. A few rather famous establishments in Bali were actually constructed next to rivers and close to beach with a “semi” permanent IMB.

Most people have, through newspapers and other media, been able to follow the long ongoing debate in between components of the Bali political arena. Governors and Bupatis represent the interest of the nine different regencies in Bali, in regards to zoning regulations and what areas can be developed into tourism. By several occasions there have been heated debates in between Governor and Bupatis, all representing their people’s interests. The most well known case around the “Holy” circle was around Uluwatu.

Zoning Regulations - Sunset in BaliThis all culminated with a Presidential decree issued in 2011, addressing in particular the situation in Badung, Gianyar, Tabanan and Denpasar. Denpasar is today one of the best and clearest areas in terms of building regulations.

This resulted in a different land status formula to decide if a land is allowed to be built on or not. A land classified as B1-B4 will be allowed different kinds of developments and constructions with fully approved building permits (IMB). While B5-B9 is anything from agriculture to preserved green areas and protected forest areas.

This means several land owners, including many expats, find themselves owning land they cannot build on at this stage, even if the certificate states “real estate development”. It remains to be seen what the guidelines of such cases will lead to as these are not yet issued. Cipta Karya are quite firm on refusing to issue building permits in these zones as they are haunted by legal actions if they do.

And from that date, even for a notary, it is compulsory to make a buyer aware of the status of land, facing same potential legal actions. In certain areas such as Canggu and surrounding areas, as well as the much debated area around Uluwatu temple, there may be more than a hundred land owners who find themselves in a position where they cannot build anything at all at this stage.

All of these aspects are quite easy to check, either through a trusted Notary or by yourself, supported by someone who speaks Indonesian. Be aware though that some Notaries and agents may not always expose these issues in order for the purchase to still go ahead. It is worth mentioning that a Notary represents and works for the Indonesian Government and is not only a witness to what was agreed to. They must also make sure that the agreements/deeds are within Indonesian law and regulations, as well as in the case for foreigners, that there is a set of both Indonesian deeds as well as a sworn English version.

What does this mean for the overall situation of property developments and projects in Bali?

Zoning Regulations - Beach in BaliGreat news, as it will attract more and more serious investors and developers, even from abroad. It will be clear that your view is really a green belt and not just a statement from agents. It will be clear through what else is constructed in the neighbourhood, what you may or may not do, and this can prevent any issues with government institutions in the future.

It’s time for all vendors and clients, as well as future investors, to take Bali seriously and consider long term impacts. The Indonesian central government, as well as Bali’s provincial government, is certainly on it to enforce and strengthen these issues. Make sure you do the right thing. Make sure you buy what you perceive you are buying. Without the right advice it’s a jungle out there.

About Terje Nilsen

Terje H. Nilsen is Principal of Ray White Paradise Property Group. He was born in Norway 1967, been working 20 years in Indonesia within the Fitness, Spa, Leisure, Hotel and Mall industry. His hobbies are sport, Balinese Culture, and Spirituality.

3 Responses to “Zoning Regulations”

  1. Lee says:

    Thank you for the informative post, Terje. I understand your point about future benefits for buyers and a clearer understanding of land zoning going forward.

    However, I am not sure I understand how this is good news for investors. It is an investor’s nightmare to have a governmental system-in-progress, that changes the rules and zonings -after- one has purchased land of one type. They’ve just changed the rules, they’ve done it in the past (as you’ve cited) and I see no indication that they won’t do it again.

    As you’ve pointed out, a great number of land owners (foreigners included) now have land that we cannot build on, nor can we sell it at a market price, as nobody wants to buy farmland. For those of us who paid market prices for land, with a governement certificate that states the land can be developed,

    You are correct, there are now many landowners with a classification for development (purchased in 2010 in my case), and the government has changed the zoning of that land after the recent election, leaving us with a piece of land that I now cannot build upon, even though my original certificate at the time of purchase showed it as build-able.

    Simple Math: I bought something at B2, paid a B2 price, and now the government has decided that my land is B5. Is that good for investors? I think not.

  2. Terje H Nilsen says:

    Hi Lee

    I understand your concerns and agree that it might not be very fair.

    The truth is that the government have not changed much on the main zoning regulations nor areas. and i am not sure of your specific case, if you email me your land certificate i would be happy to do a check for you. How ever it was common trade for BPN (land registration office) to change zoning on specific land locations with out changing the master zoning for the area. Legal or not, i dont know, and i would think probably not the best practice legally. A lot of this has to do with the due dilligence that the notary or legal adviser you may or may not have used. This is when it should appear that this could be questionable. Many agents will also not bring these aspects up. They will state its not in their scope of responsibility, but then again in most countries there is a liability also towards the agent.

    The zoning map changes as i mentioned has not changed much, it is just being enforced better. That is good for a market area. Changes now coming in the future will be converting step by step areas into different level of allowing developments. Not the other way, as people felt was the case with the 2011 presidential decree.

  3. Lee says:

    Hello Terje,

    Thank you for the thoughtful response, and you’ve correctly pointed out a key issue here where specific locations are changed without a change in the master zoning record… this seems to be exactly what happened in my case, that they just reverted all of those changes that were made, legally supposedly (?) back to the status of the master zoning record.

    I am still in the process of trying to discover exactly what happened, and what, if anything, I can do about it…

    So, in one sense, I am seeing your point, that a more stable government system would hopefully lead ‘new’ buyers into the correct status of property and avoid the types of property the many of us have purchased in the not-so-distant past. Again, assuming the government actually sticks with it.

    Many thanks again for the excellent explanations and providing an open education for your readers!

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