Posted by Agung on Wednesday, 7. October 1998 at 19:12 Bali Time:
In Reply to: Building costs etc. posted by PVL staff on Wednesday, 7. October 1998 at 13:25 Bali Time:
The essence of the "thousand year lease" arangement I have devised centers on the use of what you call an Indonesian Nominee as opposed to the Foreign Investment Company approach that your company seems to favor.
This approach works best when the proposed house is going to be built within the borders of a village community and it is essential that the "nominee" be from that particular village. The buyer, through his nominee must be willing to want to become part of the community he/she wishes to build in and I fully realize that many westerners will not be willing to take all the appropriate steps to assure this, i.e. becoming close to the village banjar, contributing to the maintenance of the temple, participating at various ceremonies, etc.
However, once this is accomplished, the lease between the nominee and the non Indonesian "owner" can be contructed around the basic elements of pewaris, or the understanding and acceptance that the property and its arrangements get passed down from generation to generation. In other words, the binding elements of the lease between the "owner" and the "nominee" becomes bound to the heirs of each party. Since there is no number of years that pewaris can be restricted by, in order to demonstrate the good faith that eventually all rights should revert back to the pewaris of the original "nominee" we utililized a thousand years as the point when this occurs, i.e. transfer back of all rights to the Indonesian citizen's descendants.
You are right in pointing out that this is only as good as long as nobody disputes it. However, this would be unlikely so long as the original "owner" and his/her descendants (pewaris) continue to remain active members in the village community.
This is only a quick synopsis of the essential ideas behind my one thousand year lease approach. I spent a considerable amount of time researching this and developing the proper language to accurately defines the whole approach covered in the agreements that are signed by the nominee and buyer. Also, as I said, I worked closely with what I regard as an excellent lawyer in Denpasar, and in particular paid special attention to what courts would hear the arguments if the contract was disputed in the future. Nothing is guaranteed in writing in Indonesia and I am not naive to this point. However what my lawyers agreed on with this concept is that it would have a much better chance of holding up in a court if disputed than a dispute against a Foreign Investment Company.
Sorry about my error in the measurements of my house. It is 3,000 square feet, not 1,000 square meters.
I disagree with your assessment of Ubud as not being that desirable a place to build or easy to rent property located there. Ubud is centrally located in Bali and certainly is one of the most popular spots in Bali. Surely you have witnesses yourself the remarkable growth in the area over just the past two years. It is not uncommon to see rents of $500.00 a week for properties located there which could be built for under 100,000 U.S. dollars. Sure, the waterfront properties are the prime of Bali. But just like all New York City residents don't live on Park Ave., the same applies to Bali. Give me a great view of a terraced rice paddy, cool breezes, peace and quiet and I'm as happy as a clam in a thousand feet of water!
I hope this answers your questions. Selamat tinggal!