In DKI Jakarta province, when a party intends to sell a plot or plots of land located in an area of more than 5,000 sqm, they will first need to obtain the Principal Approval of Land Release (Surat Persetujuan Prinsip Pembebasan Lokasi/Lahan / "SP3L") prior the execution of deed of sale and purchase of the land before the land conveyance.
What is SP3L and Why SP3L Needs to be Obtained prior the Execution of the Deed of Sale and Purchase of Land?
The main provision concerning SP3L is contained in the Article 1 of The Decree of the Governor of DKI Jakarta No. 640 of 1992 concerning Provision on Land Release without Permission from the Governor of DKI Jakarta ("Decree 640/1992") which provides that the release of an area of 5,000 sqm2 or more and/or less than 5,000 sqm but located in the main/protocol road of DKI Jakarta area, must first have the SP3L issued by the Governor of DKI Jakarta, prior the acquisition/land release concerned. However in practice, the requirement for main/protocol road is not enforceable since there is no clear definition to the main/protocol road itself in DKI Jakarta. Therefore, the government of DKI Jakarta will only require SP3L for the release of an area of more than 5,000 sqm2.
In addition to the above, Point (a) of The Regulation of the Governor of DKI Jakarta No. 134 of 2011 concerning Exception on the Imposing of SP3L ("Regulation 134/2011") provide that any party or legal entity intending to release the land for construction/development purpose with the area of 5,000 sqm or more, must obtain the SP3L. While Article 1 Point 6 of Regulation 134/2011 regulates land release as an action to release the legal relation between the holder of land title and the land title in consideration of compensation made on a mutual agreement.
In furtherance to the above, there is also a provision relating to the SP3L and land release as stipulated in the Article 1 Paragraph (1) Point (c) of The Decree of the Governor of DKI Jakarta No. Da.11/3/11/1972 concerning The Procedure on Application of SP3L and SIPPT and Procedure on the Land Release for the Official/Private Purposes in the Area of DKI Jakarta (Decree 11/1972) which stating the land release as: "Purchasing, releasing of right, indemnification and/or any forms whatsoever over the land and any objects above such land with the purpose to use and apply the right over it".
Based on the above explanation, it can be concluded that SP3L is required in order to acquire a plot or plots of land with the area of 5,000 sqm or more and it is not only required for the transfer of uncertified land but also for a plot or plots of land with the land title.
Exceptions from the Obligation to Obtain SP3L
There are exceptions from the obligation to obtain SP3L as stipulated in the Regulation 134/2011 as follows:
- swap between central government and local governments;
- non-cash equity participation by a shareholder;
- purchase of a vacant land by central government and local governments;
- purchase by a region owned company for self-used;
- land plots for use by a foreign government on the basis of reciprocity; or
- land plots within industrial estates or other estates designated by government as a special estate.
What is the Remedy for Sale and Purchase of Land in the Area of more than 5,000 sqm2 which is Conducted without obtaining the SP3L?
In the event that the sale and purchase of land located in the area of more than 5,000 sqm2 has yet to obtain the SP3L, then technically the Decree 640/1992 will provide the provisions as follows:
- the Governor of DKI Jakarta will take possession of the location and designate its use in accordance with the prevailing regulations;
- the Governor of DKI Jakarta will reserve it for other party(-ies) with the settlement terms will be further regulated by the Governor of DKI Jakarta in accordance with the prevailing regulations; or
- The person/entity concerned as the purchaser of the land will be given a chance to obtain an SP3L by imposing additional obligations as determined by the Governor, in the forms of:
- obligation to first provide financing and developing the cheap flat (Rumah Susun Murah/"RSM") together with its facilities until the RSM is ready for habitation of 20% of the commercially area of the land concerned, which location, type, and criteria will be determined by the Governor of DKI Jakarta;
- obligation to first provide financing and developing until ready to use, of the building facilities for environment, which location, type, and criteria will be determined by the Governor of DKI Jakarta;
- obligation to provide financing and build until ready to use, other building facilities in accordance with the priority needs will be determined by the Governor of DKI Jakarta.
Notwithstanding to the above solutions provided for by the Governor of DKI Jakarta in the absence of SP3L, in practice, the above additional obligations can be converted into sanction in the form of money which will be calculated and assessed by the committee appointed by the Service Office of Spatial Layout of DKI Jakarta with a certain formula as provided in the Decree of the Governor of DKI Jakarta No. 1934 of 2002 concerning Provision on Calculation of the Value to Build the Low Cost Apartment which Converted into Money by the Holder of SIPPT (Decree 1934/2002).
On the above, it can then be concluded that based on the definition SP3L will be required only for a transfer of uncertified land in order to protect the right of the previous owner; however, other provisions of the prevailing regulations as explained earlier provides for the land object which is a certified land to also obtain the SP3L. Though it is quiet irrelevant for a sale and purchase of a certified land to also require the SP3L however the provision should be fulfilled to avoid breaking the rules and regulations concerned.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.