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What to Watch Out for When Renting Property in Indonesia

While buying a house remains every person’s ultimate life dream, the ever-increasing prices of real estate globally are pushing more people to settle with renting spaces to call a home. But do the perks of renting really outweigh the pitfalls? Let’s take a look at Indonesia’s property rental landscape.

Indonesia, Korea and Taiwan are among the few Asian countries where landlords generally require their tenants to make an upfront payment of the rent for the entire period of the lease, which is normally a one or two year period.

This has been the arrangement since the 1970s when the archipelago was just starting to develop, leaving minimal accommodations available for expats. The practice, however, proves disadvantageous for the tenant, leaving them helpless, weak and with the least legal recourse, particularly when it comes to disputes with the landlord or property agent.

Truth be told, renting property in Indonesia is a ‘proceed at your own risk’ kind of situation.

One will not see a strict implementation of building codes enforced on residential properties in the country. Landlords are notorious for irregularities in the business, such as putting up apartments or buildings using substandard materials or approving Band-Aid repair work.

More often than not, tenants walk into their newly leased property without the faintest idea of the unpleasant surprises they will encounter during their stay. Sadly, some of these problems that cheap construction brings pose serious risks to the tenants and their families.

It should therefore go without saying that every tenant needs to be vigilant about these ‘hidden’ tactics and be disciplined about conducting a property audit prior to signing the lease and settling the bill.

Note that a complete property inspection or audit normally consists of the following:

  • An electrical audit to check on the installation, materials, grounding, balance, power supply, safety, lightning protection and more.
  • A plumbing audit to examine the water tanks, pumps, faucets, heaters, pipework installation, drains and more.
  • A structural and waterproofing audit to check on the walls, flooring, roofing, carport, ceiling, stairs, awning and more.
  • An air-conditioning audit to examine the air-conditioning units on the property, the drainage, blowers, filters and their operational conditions.

If needed, other property inspection services are likewise available, such as those that will check and verify the registration of the electrical appliances in the house, examine the swimming pool, assess structural damages after an earthquake and inspect and make recommendations on how to reduce pests on the property, among others.

Property inspections are ideally based on industry standards, but the archipelago does not have those that are officially regulated. Should you need a property audit, make sure to ask the company you’re hiring for their credentials. Go for those following the standards from the United States, United Kingdom and Australia.

It is recommended that you ensure your rented property has an Electrical Leakage Circuit Breaker (ELCB) properly installed.

As its name suggests, the ELCB will automatically cut off the power supply in the house in the event of grounding, power shorting, an accidental touching of a live wire or when the power is tripped.

While the ELCB is not very expensive, many landlords still prefer to forgo installing it on their properties for rent, despite knowing that it considerably protects tenants and potentially saves lives. Of course, landlords often argue that the ELCB is very sensitive and can automatically go off if any of the electrical wirings are installed incorrectly.

After organizing a property inspection prior to signing the lease, outline the problems and possible risks that you discovered based on the report. Having this list in your hands will give you bargaining power with the landlord. Sit down with the landlord and request for the defective, missing or broken items to be repaired or replaced based on the audit report and the list you have on hand, particularly those issues that carry safety risks.

Here, as a prospective tenant, you will be able to determine how prompt and responsive the landlord will be to other issues that may arise during the lease period based on whether or not he agrees with the issues that you raise during the discussion. After this, you may call the property inspection team again to make another sweep of the property to ensure that, indeed, all your concerns have been fixed, replaced or properly addressed.

Santa Fe’s Property Management Division Manager Teddy Ragg explained that with the staggering electricity costs in Jakarta and the fact that bigger households are shelling out higher premiums, energy inspections for properties are becoming more popularly requested from his office.

An energy audit will basically register all equipment, appliances and devices on the property that run on electricity, including hair dryers, water pumps, water heaters, electric fans, microwaves and so on. The tenant will then have to inform the inspection team about the usage of each piece of equipment so the auditors can make recommendations, based on their energy audit report.

Ragg added that in most cases, tenants who are able to efficiently reorganize the electrical usage in their homes are able to reduce their electrical consumption and costs by as much as 60 percent every month.

Information for this article was gleaned from Living in Indonesia. For more details please visit www.expat.or.id/info/pitfallsrentingindonesia.html

 

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Nadya Joy Ador is a Philippines-based journalist and editor for Content Collision. She routinely covers business, news, and human interest topics. See her portfolio at nadyajoyador.c2live.com and build your own for free!