The right to adequate housing, as mandated in Article 28H paragraph (1) of the 1945 Constitution, cannot be fully protected without proper legal understanding in every property transaction. One essential concept that prospective buyers must understand is the PPJB.

This is important because the PPJB serves as the initial legal foundation in buying and selling houses or apartments. Read this article thoroughly to gain a complete understanding before signing any property purchase agreement.

What Does PPJB Mean?

First, it’s important to know that PPJB stands for Perjanjian Pengikatan Jual Beli (Conditional Sale and Purchase Agreement).

Technically, a PPJB is an obligatory agreement, where the seller promises to sell and the buyer promises to purchase a property (land or building) at a mutually agreed time.

From a civil law perspective, PPJB is based on Article 1338 of the Indonesian Civil Code, which states that all legally made agreements are binding as law for the parties involved.

PPJB is typically used due to technical constraints that prevent the immediate creation of a Deed of Sale and Purchase (AJB). For example:

• The property is still under construction (pre-order/indent)

• The master land certificate is still being subdivided at the land office

  
  

However, regulations have become stricter through Ministerial Regulation of Public Works and Housing No. 11/2019 and Government Regulation No. 12/2021.

Today, if you purchase a house under construction or an apartment unit, the PPJB must be executed as a notarial deed, giving it stronger legal standing as authentic evidence.

What Is the Function of a PPJB?

If an AJB will eventually be issued, what is the purpose of a PPJB? In fact, its role is quite extensive:

1. Provides Transaction Certainty
The primary function of a PPJB is to “lock in” a unit so it cannot be sold to another party. Without a binding agreement, developers may sell the same unit to someone else at a higher price.

With clearly stated unit numbers and locations, your legal rights to the property are secured. It also ensures price certainty, preventing changes due to inflation or rising material costs.

2. Supports Financing Applications
Banks in Indonesia require PPJB as a supporting document for mortgage approval (KPR). It serves as proof of a legitimate commitment between buyer and developer.

Even if the certificate has not yet been transferred, banks may disburse funds based on developer guarantees (such as a buy-back guarantee).

3. Enforces Rights and Mitigates Breach of Contract
If either party fails to fulfill their obligations, the PPJB provides a legal basis for dispute resolution.

Common forms of breach covered include:

• Delayed handover: Specifies penalties per day of delay

• Specification mismatch: Serves as evidence if the completed unit differs from agreed specifications

• Buyer default: Regulates cancellation procedures and refund deductions

• Delay in AJB issuance: Determines the timeline for ownership transfer

  
  

4. Strengthens the Buyer’s Legal Position
Another key function is protection for good-faith buyers, as recognized in Supreme Court Circular Letter No. 4 of 2016.

This regulation states that if the buyer has fully paid and physically occupies the property, ownership transfer is considered legally valid—even if the AJB has not yet been issued.

This protects buyers if the developer faces legal issues or bankruptcy.

5 Things to Check Before Signing a PPJB

Don’t rush into signing just because of discounts. Here are key aspects you must review carefully:

1. Verify Land Legality and Basic Permits
Ensure the developer holds a valid land certificate (SHGB or SHM) under the company’s name. Also confirm the Building Approval (PBG) is in place.

2. Ensure Minimum 20% Construction Progress
Current regulations prohibit developers from collecting significant payments or signing agreements before construction reaches at least 20%.

• For landed houses: based on number of units, roads, and drainage availability

• For apartments: based on main structure construction progress

  
  

You have the right to request a progress report from the supervising consultant.

3. Review Payment Terms and Cancellation Policy
Payment structures must be transparent, and funds should go to the company account—not a personal one.

Based on Government Regulation No. 12/2021:

• If the developer defaults ? 100% refund

• If the buyer fails to secure a mortgage ? max 10% deduction

• If the buyer cancels unilaterally ? min 20% deduction + taxes

  
  

4. Check Technical Specifications and Handover Timeline
Ensure all material specifications are clearly stated—from tiles to paint brands. Marketing brochures are also legally binding.

The handover date must be specific (day, month, year), along with a minimum 3-month maintenance period.

5. Take Time to Review the Draft Agreement
You are entitled to receive the PPJB draft at least 7 working days before signing. Use this time to carefully review every clause.

Consult a notary if needed—their role is to explain the contract and verify the legality of all parties involved.

Looking for a Trusted Property Developer?

After understanding these legal complexities, it’s natural to seek a developer with a strong track record and regulatory compliance.

One example is Jakarta Garden City, developed by PT Mitra Sindo Sukses, which is known for adhering to high regulatory standards in Jakarta.

Its credibility is backed by multiple prestigious awards, including Best Township Development at the PropertyGuru Indonesia Property Awards 2024, as well as international recognition from the Asia Property Awards.

Beyond accolades, the developer demonstrates commitment through real infrastructure projects—such as flood diversion channels connected to the East Flood Canal (KBT), handed over to the Jakarta provincial government.

Project delivery is also consistently on time, as seen in developments like Shop House Cleon Park.