How to find a good Notary and lawyer in Indonesia

When it comes to purchasing a property in Indonesia, in Bali, Lombok or Sumba, finding the right lawyer and notary is key for a protective and successful transaction.

As a foreigner, finding a notary can be challenging due to the language barrier and the number of notaries in Indonesia. Most of the time, sellers or buyers offer to the other party to use their notary for the transaction.

However, how to know if the notary has no conflict of interest and will protect the interests of the parties? A notary is supposed to be a neutral person in contrast to a lawyer who will protect the interests of their clients. While the notary is paid once the transaction has been successfully accomplished and signed, the lawyer is usually paid before or during the deal to protect the interests of its clients. Sometimes notaries ensure a minimum service while the lawyer will push deeper into its role.

If you need to find a notary who is impartial, it’s advisable to seek recommendations from trusted sources or verify their credentials independently.

What is the role of the notary in Indonesia for property transactions

Notaries operate under Law No. 2 of 2014 (amending the Law No. 30 of 2004) on the Position of Notary (Undang-Undang Jabatan Notaris – UUJN) and they are appointed by the Ministry of Law and Human Rights.

Notaries handle property transactions on different aspects and levels on Freehold or leasehold properties.

The notary/PPAT drafts and legalizes authentic deeds related to property, such as:

• Deed of Sale and Purchase (AJB – Akta Jual Beli)
• Lease Agreements
• Deed of Gift (Akta Hibah)
• Mortgage Deed (Akta Hak Tanggungan)
• Right Transfer Deeds (Akta Pengalihan Hak)

Once the deed is established, the notary will handle Taxes and arrange payments (BPHTB) and PPh (Seller’s Income Tax). Once the tax is paid, the notary registers the Ownership Transfer and submits it to the BPN (National Land Agency) to update the land certificate under the buyer’s name.

Leasehold agreements and Property Purchase

In Indonesia, a Notary prepares leasehold or construction agreements based on information provided by both parties. Each party designs these agreements to align with Indonesian law and ensure mutual protection. While parties can legalize or notarize the agreements, notarization engages the notary’s responsibility though in practice, many notaries don’t actively enforce the terms when disputes arise.That’s why it’s crucial to find a notary who is reliable, experienced, and proactive in safeguarding both parties’ interests.

For leasehold agreements, using a notary is optional since the contract is considered a private arrangement and isn’t registered at the land office (BPN). However, a notary is mandatory for freehold property transactions, from the sale deed (AJB) to tax payments and title transfers. Whether for lease or ownership, it’s always best to find a notary who can guide you through the legalities with professionalism and clarity.

In other words, notarising a leasehold agreement is not mandatory, and we recommend using legalization to reduce the notary fee. However, for a freehold property under a PT PMA, the selection of a good notary is important for following up on transactions.

Due diligence on property

One of the important roles of the notary is to conduct due diligence on the property to ensure the legality of the transaction. The due diligence on the property covers the basic scope such as:

• Ownership
• Mortgage
• Land and Building tax
• Zoning from BPN (land office)

It is rare to see a person trying to sell a property with a mortgage or a property that does not belong to that person. Due diligence is crucial before signing the final agreement and requires special attention to additional aspects that lawyers will cover differently. 

Some notaries care more about the deal than due diligence. They’ll push through agreements even if one side gets screwed by missing info or shady clauses. Always find a notary who actually protects you, not just the transaction. For example, despite the agrarian law, clearly defining the inability of the non-resident to sign an Hak Sewa, most notaries accept the agreement to get commission.

Also Read : Optimize Tax on Property Investment in Lombok and Bali

Get professional legal advice for Indonesia

Indonesia’s legal system is complicated, with its many regulations, licences, and special rules for foreigners. Don’t make the mistake of trying to navigate it alone, and get the help of experienced consultants instead. 

At ILA, we can help you with intellectual property, corporate law, drafting, reviewing and managing legal documents, navigating commercial transactions and much more.

You’re not alone. Reach out today to schedule a free consultation or read more about our legal service.

What is the role of a lawyer in Indonesia for property transactions

Lawyers in Indonesia are regulated under Law No. 18 of 2003 (Undang-Undang Nomor 18 Tahun 2003 tentang Advokat) and are members of the PERADI association.

Unlike the notary, a lawyer is a mercenary and works for their clients in order to ensure the best deal and protection for their clients. In property transactions, lawyers will start at the beginning to draft or review the offer and suggest additional clauses that are more protective or favourable to their clients.

In property transactions in Indonesia, lawyers play an important advisory, due diligence, and documentation role, especially when there are legal complexities, such as:

Role of Lawyers in Indonesian Property Transactions:

Notaries do basic legal checks, but lawyers dig deeper to protect their clients. Always find a notary and a good lawyer for your deal. Lawyers as notaries thoroughly check the status of the land or property:

• Title validity (SHM, SHGB, etc.)
• Zoning and land use 
• Encumbrances (mortgages, disputes, liens)

Lawyers are crucial in property deals, especially for foreign buyers. They advise on the best ownership structures like PT PMAs or joint ventures to optimize taxes and legality. They also help you find a reliable notary to ensure all paperwork follows Indonesian law.

In addition to reviewing Sale and Purchase Agreements, Lease Agreements, and Shareholder Agreements, lawyers also prepare Escrow arrangements and negotiate on behalf of clients. If the buyer or seller is overseas, lawyers can represent them up to the point of signing—and often work closely with clients to find a notary who can notarize or legalize documents locally.

As a crucial part of the deal, the lawyer will coordinate with the notary to create and legalize the official deed (AJB) or lease agreement.

Notary versus Lawyer Which one to use