Landlords and Tenants

Information on the obligations of the landlord and the tenant when renting proeprty in Indonesia...

The Indonesian Civil Code covers some of the basic rights and responsibilities of both landlords and tenants. Most regulations are comparable to contract laws found in western countries.

Landlord's obligations

  • The landlord must deliver the rental property and fixtures and fittings, as leased to the tenant, in good condition
  • The landlord must maintain the rental property in such a way that it can be used for its intended purpose by the tenant
  • The landlord must ensure the tenant can enjoy the rental property in safety
  • If defects in the rental property inflict loss for the tenant, the tenant must be compensated by the landlord
  • The landlord cannot change the "shape and composition" of the property during the contract
  • If damages to the rental property occur during the rental period and repairs cannot be postponed until after expiration of the contract, the contract must continue to be honoured and repairs made. The tenant's rent must be reduced if repairs last longer than 40 days and result in a loss of access to the property
  • If the rental property is somehow rendered uninhabitable, the contract can be terminated by the tenant or landlord
  • The landlord is not responsible for an infringement of rights to and enjoyment of the rental property, due to the actions of a third party
  • If there is an ownership dispute about the rented property or its goods and a lawsuit is filed in court against the landlord, the tenant is entitled to reduced rent
  • The landlord must pay for damages that have not been caused by any fault of the tenant beyond ordinary, daily wear-and-tear
  • The landlord is responsible for maintaining clean wells and rain tanks

Tenant's obligations

  • To use the rental property and goods leased according to their purpose, and the contract agreement; or if no agreement exists, in accordance with the general purpose of the property
  • Pay rent on time
  • If the tenant uses the leased goods property for any purposes that may cause a loss to the landlord, the may terminate the contract
  • Tenants are responsible for any damage to the property during the contract, unless proof of innocence is provided
  • In case of fire, tenants are not responsible for any damage, unless it is proved that the tenant caused the fire
  • If a written description of the state of leased goods is made, the tenant must return them in the same state or be liable for losses
  • Tenants are responsible for any damages or losses incurred to the rental property which are caused by friends or those who sub-let the rental property
  • Minor repairs caused by daily wear-and-tear are to be borne by the tenant, within reason

Tenant's rights

Tenants are not given many rights beyond what is mandated as a landlord's basic obligations, and taking a landlord to court is usually a waste of time and money. Although the law is, in theory, neutral in matters concerning landlord-tenant disputes, the Indonesian court system is slow, cumbersome, and subject to corruption.

Common Contractual Problems

There are two main problems:

  1. Landlords do not comply with the length of time agreed upon in the contract: for example, the property is sold while tenants are occupying the property. Legally, contract terms that are properly documented are binding, and must be honoured by either the old or new owner. If the new owner attempts to evict the tenant, using the reason that the tenant was not party to the contract, eviction - whether lawful or not - is a lengthy legal process in Indonesia, which can take up to nine months to complete.
  2. Prospective landlords demand a down payment to secure a contract before a contract is signed. This is to be avoided as sometimes the landlord rents the property to another party and does not return the deposit. The general rule is to pay the agreed contract fee at the same time as the contract is signed.