AngloInfo Text_Renting a House or Apartment in Indonesia

RENTING A HOUSE OR APARTMENT IN INDONESIA

General Overview

Location is the primary determinant in the relative ease or difficulty of renting a suitable place to live in Indonesia.  Length of stay as well as personal needs and taste also makes a big difference.

Renting in Bali, Jakarta or lesser-known destinations present different challenges.  Bali is a renter’s market and generally more expensive than anywhere else.  Supply has outpaced demand in Jakarta over the past few years, so both availability and prices for good places to rent have improved. In places that are off the beaten track, the housing market will vary considerably.  It may be harder to find, but also may present easier-to-negotiate, cheaper prospects.

But before exploring these factors more closely, it’s best to provide an introduction to just what sorts of places are available for rent in Indonesia:

• A Family Home:   There is the possibility of renting out a bedroom in an Indonesian family’s home.   Often you can negotiate for meals and laundry as well.  This usually happens through informal means, such as meeting and becoming friends with a family of Indonesians.

• Hotels and Penginapan:  renting what would usually be considered an overnight room, whether it is in a hotel or what in Indonesia is called a penginapan (generic, simple lodging) is an option for the long term.  Long term stays can often be negotiated.  This generally serves best a single person or couple.  Again, meals and laundry are sometimes available for an extra fee.

• Kos or Kost: outside of Bali, Jakarta and a handful of other highly developed areas, the typical western-style apartment doesn’t really exist in Indonesia.  If not a hotel or a house, most rental units, or kos, are more akin to being a simple room as might be found in a boarding house or residential hotel.  They usually don’t amount to much more than a small space- sometimes furnished, and sometimes not.  Private bathrooms are sometimes provided, other times they must be shared. Sometimes signing a six month or year contract will be necessary; other times one can pay month-to-month.

• Houses:  There are plentiful single family houses to rent in Jakarta and Bali due to the market.  As most foreign residents come and go, there is considerable turn-over, too.  In other parts of Indonesia, houses are available, but generally to a much lesser degree.  Houses are most often owned by families who may have lived there for generations, and aren’t used for speculative income.  Basic terms usually require a rental contract of one, two, or three years.   Houses come both furnished and non-furnished.  This is usually a study in two extremes- either completely empty of any furnishing or fully equipped.   The costs reflect this- furnished houses are often twice the price.  Empty means no refrigerator, stove, cupboards, and many times no kitchen sink as well.  Don’t expect there to necessarily be running water as many homes are serviced by wells, but in an urban setting, most likely there will be some kind of indoor plumbing.   Many homes offer some degree of air conditioning, but only expensive, modern homes have hot water boilers.

The start-up costs of renting a house can be more expensive than one imagines.  Gas stove, refrigerator, beds, bedding, cooling fans, dressers, and other forms of storage have to either be bought or rented.  Few traditional Indonesian homes come designed with built-in closets or enclosed garages.  Only more recent housing stock as found in upscale Jakarta gated communities or Balinese villas offer what could be considered more modern touches.

• Large complexes:  More modern and upscale housing estates, apartments, townhouse/condominium communities are largely specific to Jakarta.  These types of accommodations are especially designed for more well-off Indonesians, foreign embassy staff, exchange students, or other temporary foreign residents.  Hence the rental terms are tailored to such a clientele. They tend to attract foreigners who are working in the greater Jakarta area.   They look and feel very much like their western counterpart.  Security, community playgrounds, swimming pools, gyms, saunas, recreation rooms, and playing fields are common amenities.  Some even have their own private golf courses.

This style of housing which caters to foreign workers often features quarters for a live-in maid or servant.

See the Expat Housing Forum as listed under Further Information for a detailed look at Jakarta’s housing opportunities.

• Balinese Villas:  Bali specializes in palatial housing compounds that are often built on spectacular sights with views of the ocean.  Service staff comes as a part of the package.  Rentals vary from a week to a year or more.  There exists a disproportionate promotion of this housing stock in comparison to all others in Bali due to the hefty commissions that can be made by real estate brokers.   The cost for such rentals is on the high end of all listings.  It compares in price to the housing provided high ranking foreign embassy officials in Jakarta.

Finding a Rental

Real estate agents and agencies as known in developed countries don’t much exist in Indonesia outside of Bali and Jakarta.  But there exists a plenitude of housing services in both these areas.   Scores of them operate internet websites as well.  

In the case of Bali, many are primarily property management companies who look to rent villas or deal in real estate sales with routine rentals being a side lined business activity.  They promote their premium rentals and don’t necessarily serve those looking for simpler, less expensive accommodations.  In that sense, many lack motivation and aren’t responsive to cold inquiries by phone or email unless you want to rent a very expensive home.   In any case, it is better you show up in person to their offices.  The anecdotal evidence provided by expatriates living in Indonesia, though, expresses a mixed record concerning the trustworthiness and reliability of Bali’s housing services.

Presently, Jakarta’s situation is different.  As mentioned, Bali is an owner’s market, and Jakarta’s a renter’s.   Since the Bali bombings and terrorist attacks in Jakarta itself, a large number of foreign workers and expats have left Jakarta, leaving many vacancies in the housing and apartment complexes that were speedily developed in large numbers during the 1990’s to serve an influx of embassy personnel and foreign workers.  Contacting the property management group that negotiates leases for such planned communities is easy and they can generally be trusted.  Their leases are standard, their terms and prices competitive, and upon visiting such communities, there will be chances to meet and talk to other foreigners who are current tenants.

In the case of either Jakarta or Bali, there is one commonality, and that is the finder’s fee.  A renter who uses a real estate broker will customarily pay one to one-and-a-half month’s rent as based on their new lease as required payment.   The incentive for agents to rent pricier housing stock and neglect the rest is apparent.

Gated communities and western-style housing complexes won’t suit everyone’s taste or budgets.  Housing for much less money is available in Jakarta.  Expatriates looking for more Indonesian-style housing will have to beat the streets and head into the haunts of expatriates in order to seek out leads and recommendations.

In general, the best way to find suitable housing is through networking, both virtual and real.  This includes research on the internet, communications through expatriate website forums, and word of mouth.   For foreigners working in Jakarta or Bali, the workplace will provide much needed information.   Newspapers provide little clear information in the way of housing rentals, and one needs to know the language to benefit from what’s in print on the streets.

For those who have the luxury of time, a good option is to find a reasonable hotel, and stay for a couple weeks in order to look for something permanent.   Count on the fact that a successful search will take a fair amount of time to accomplish. Hotel rates are such that this provides an affordable option for most people.

Company-Provided Housing

Foreign residents who come to Indonesia to work are sometimes given the perquisite of company housing.   Their company arranges for housing the lease of which ends in coincidence with the projected termination of the employee’s work contract.  Incidents do occur when these two dates don’t properly coincide, or else the employee’s housing allowances are suddenly revoked or revised.  This creates problems beyond the scope of this paper, but foreign workers should be aware that they might be forced into a position to seek out housing on their own.

Housing Leases

Time Frames

When renting a house in Indonesia, if a landlord requires a lease, the time period involved is usually one or two years.  Sometimes six months is an option, and in Bali, three years is not uncommon.

Terms of lease can be problematic for temporary foreign residents whose length of stay doesn’t fit these customary time frames.   Indonesian-style housing leases usually demand full payment up front as well, especially if it is for six months or a year.  Because of this, there is a big market for sub-leasing, especially in places like Jakarta and Bali.  Sub-leasing is legal, and widely practiced.  Sub-leasing must be done with full knowledge of the landlord, and if any damages occur during the sub-lease, the original leaser is liable.

Kos rentals often demand a payment of one year in advance, too. 

Written Leases

Boiler plate, pre-prepared contracts are sometimes provided by the landlord- especially in the case of Jakarta’s large rental complexes.   These contracts are rarely negotiable. 

Outside of this particular housing niche, the lessor and leaser negotiate the terms in full and write a contract to suit their individual agreement.  The two parties sign the document as stamped with a materai (see Indonesia- General Taxation for more information on use of the materai tax stamp).  Sometimes a notary service can be called in (usually by the leaser) to secure the legality of the contract, but this is not customary as it drives up cost.   Notaries generally require a fee that is 1.0% to 1.5% of the lease contract as reported.  (Note that Indonesian notaries are closer in status, skill, and function to a western-style lawyer than they would be to a paralegal and command larger fees)

Most written leases cover only length of contract, payment due, method of payment (whether lump sum or by installment), special considerations specific to rental in question, and possibly issues surrounding a security deposit.   But in general, any specific issue of importance to the leaser should be made specific reference to in writing as part of the contractual terms.   The longer the lease period, the more careful the leaser needs to be about details.

By definition, the landlord will be Indonesian, as only Indonesians can legally own a house or property. When the lease is signed, they must present to the leaser their KTP (Kartu Tanda Penduduk, or National ID card).  A copy of the rental’s land certificate should also be provided as proof of who actually owns the rental * (copy of the land certificate).  The leaser, if foreign, needs to show their passport and KITAS (temporary residence VISA), though in some cases, landlords overlook the VISA.   

*Note: A prospective renter should not enter any housing lease without having inspected the landlord’s valid certifikat tanah (land certificate or title) which verifiably pertains to the land and its house which is being offered for rent.   The land title should be signed by the owner, and not a proxy.

Before entering a lease agreement, the leaser best review obligations the civil law mandates for both parties to the lease.  (See Civil Codes below)

Common sense prevails in bidding a lease. Chances for a long-term, smooth relationship with an Indonesian landlord will be good if preliminary meetings are civil and terms open to reasonable negotiation.  

Utilities

Utilities are usually the responsibility of the renter, especially if the rental is a house.  Water and electricity hook-ups will usually be pre-existing, so establishing new service will cost nothing, or will requires at most a nominal fee.  Installing land line telephone service can be expensive though, as few Indonesians have home phones and most likely one would have to pay for a telephone line to be run out from the nearest service box to the rental in question.  But this is usually a non-issue as almost everyone uses cellular phones.  Internet services don’t necessarily require phone lines either as access through WI-FI or wireless USB modem is available anywhere there exists cell phone towers.  Monthly rates for such wireless services have dropped dramatically just recently.

Informal Rental Arrangement- the case of no written lease

There are cases where no written lease is involved, but this would more likely apply to high turn-over occupancy rentals such as kos, or boarding rooms.  Most likely in such a case rent is being paid month-to-month.  Renting houses without the demands of a written lease is extremely rare, especially if foreign renters are involved. 

Giving Notice and Lease Renewal

Giving notice is not applicable as leases can’t be broken.  This is insured as payment is required in advance, so if the tenant wants to leave, they simply tell the landlord they will be moving out.  There is no law stipulating notice, but common courtesy should inform the renter to contact their landlord some days or weeks ahead of time. In any case, this is not in practice an issue of potential conflict. 

The more pertinent question is quite the opposite, and has to do with renewing the lease.  If the relationship has been good, the law supports the renter’s right to renew the lease, with a cap of rent increase being currently set at 20%. 

The Civil Code and Specific Responsibilities

Chapter VII of the Indonesian Civil Code covers some of the basic rights and responsibilities of both landlords and tenants.  Most regulations are comparable to lease laws found in western countries.  What follows is a list of the more important obligations attributed to each of the two parties:

Obligations of Lessor

• Deliver the rental and all attendant facilities and goods in total as leased to the tenant
• Hand over the rental and all leased goods in good maintenance
• Maintain the rental in such a way that they can be used for the intended purposes
• Ensure the tenant can enjoy the leased rental in safety
• If the rentals defects inflect loss on the tenant, the tenant must be compensated by leaser
• Lessor cannot change the “shape and composition” of the leased goods during terms of the lease
• If damages to rental occur during leasing period and repairs cannot be postponed until after expiration, the lease must continue to be honored and repairs made.  Leaser’s rent must be reduced if repairs last longer than 40 days according to loss of access to rented space and its functionality.  If the rental is somehow rendered unliveable, the leaser can terminate the lease.
• If damages during the term of lease render the lease uninhabitable for 40 or more days, the tenant can break the lease.
• Lessor is not responsible for infringement on rights and enjoyment of the rental as experienced by the leaser due to actions of a third party
• If ownership dispute of rented property or goods therein contained is filed for as a law suit in court against the lessor, the leaser is entitled to reduced rent.
• The lessor must pay for damages to leased goods not caused by any fault of the tenant that go beyond ordinary, daily wear-and-tear.
• The lessor is responsible for maintaining cleanliness of wells, any rain-collecting pools and the upkeep of general sanitation facilities.

Obligations of Tenant

• Used the rental and goods leased therein as appropriate to the purpose of the goods, according to the lease agreement, or if no agreement exists, in accordance with the general purpose of the goods.
• Pay rent on time
• If the tenant uses the leased goods for any purposes that may cause a loss to the lessor, the lessor may request the cancellation of the lease.
• Tenants are responsible for any damage caused to the leased goods during the lease unless proof of innocence is provided.
• But in the case of fire, this is not so, unless it can be proved the tenant somehow caused the blaze.
• If a written description of the state of leased goods is made, the leaser must return them in the same state of be liable for losses.
• Tenants are responsible for any damages or losses incurred in rental as caused by his friends or those who sub-lease the rental.
• Minor repairs as caused by daily wear-and-tear are to be borne by the tenant, within reason 
• In the case of back-rent owed the lessor by the leaser during a foreclosure, a secondary renter (one who is subletting) is not obligated to pay any more than what is normally due their length of stay.

Notes on Responsibility for Repairs

As noted above, Indonesian tenants are responsible for fixing minor repairs.  What is considered minor, though, is not clearly defined, and according to anecdotal evidence can amount to as much as 100 USD per repair.  This doesn’t extend to water and electricity services as the utility companies are responsible, but as for plumbing, that falls under the responsibility of either the owner or tenant.

Humbler rentals don’t present many repair issues if they come unfurnished.  Only expensive, higher quality rentals will offer modern, fully-equipped facilities that would more regularly need maintenance- such as air conditioning, refrigerator, stove, and washing machine.  But windows are another matter, and there can be cause for disagreement between landlord and tenant is such a case.

Modern high-rise apartment complexes in Jakarta often offer maintenance services and the cost is factored into the overall rental fee.

Security Deposits

Housing rentals that are furnished or offer modern conveniences almost always demand a security deposit.  Security deposits will vary according to how upscale a rental may be.  Apartments in Jakarta often ask for about one million rupiah (about 80 EURO).   Security deposits aren’t refundable unless all rent is paid and all repairs taken care of.

Tenant’s Rights

Tenants are not given many rights beyond what is mandated as a landlord’s basic obligations, and to take a landlord to court would most likely end up a waste of time and money.  Though the law is in theory “neutral” in matters concerning landlord-tenant disputes, the Indonesian court system is slow, cumbersome, and subject to corruption.

Certain common problems need to be looked out for and sometimes can be avoided.  One has to do with landlords not fulfilling the agreed-upon length of contract, as there are occasions when the rental is sold out from underneath the feet of the tenants.  According to law, lease terms that are properly written and documented are legally binding, and must be honored by either the old or new owner.  Even if the new owner attempted to evict the tenant, reasoning that they weren’t party to the lease, eviction- whether lawful or not- is a lengthy legal process in Indonesia, taking an average of nine months to complete. 

The other caveat has to do with prospective landlords who demand a down payment for securing a lease prior to having signed a contract.  This is to be avoided as sometimes the landlord will rent the housing to another party and not return the deposit.  The general rule is simple: pay the agreed-upon lease fee at the same time the contract is signed.

Conflict Resolution

Foreign residents don’t have much recourse in tenant-landlord conflicts in all truth.   Indonesian law affords little support to foreign residents when it comes to housing. Taking the issue to court has already by discussed.   Such disputes are civil, and the police wouldn’t be an appropriate party to call on. There remains good faith dealing with the kelurahan, or head of the neighborhood.  If that particular individual has influence and commands respect, it’s possible that their intervention might help.

In this case, an ounce of prevention is work a pound of cure.  Don’t enter a lease unless you have very good reason to believe you are dealing with a reputable landlord, that the rental is in good repair, and that the neighbors and neighborhood are appropriate.  Otherwise, find a lesser rental, pay month-to-month, and wait for the appropriate opportunity to come along.

FURTHER INFORMATION

Indonesian Civil Code- Leases
http://www.asiatour.com/lawarchives/indonesia/perdata/sewa.htm

Bali Advertizer- Advertizing for the Expat Community
http://www.baliadvertiser.biz/current_ads/real_estate.html

Ruman123.com- Housing and Property Agents in Bali
http://www.rumah123.com

BaliPod.com-  Balinese Expatriate Forum
http://balipod.com

Living in Indonesia- expat forum
http://www.livinginindonesiaforum.org

BaliBlog- Bali Travel Forum
http://forums.baliblog.com

Expat Housing Forum- detail on Jakarta’s housing opportunities
http://www.expat.or.id/info/housingforum.html

Bali Spirit- Bali Houses and Villas for rent
http://www.balispirit.com

Jalan Jaksa Forums-
http://jakchat.com/forums

For the adventurous at heart looking for expatriate haunts and news from the streets of Jakarta