Court: Provisions on Annual Fee for Land Management Rights Provide Legal Certainty

Petitioner Anisitus Amanat (right) at the ruling hearing of the formal judicial review of Law No. 6 of 2023 on Job Creation, Wednesday (1/31/2024). Photo by MKRI/Ifa.

JAKARTA (MKRI) — There are provisions that require land management agreements by other parties (third parties) to contain the amount of mandatory annual fee (UWT) adjusted to the purpose of its use, intended to provide protection and legal certainty between holders of land management rights (HPL) and other parties (third parties) as HPL users, including on management rights attached to right to build (HGB).

The statement was part of the Constitutional Court’s (MK) legal considerations for the formal and material judicial review of Article 137 paragraph (2) letter c and Article 138 of Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law. The ruling hearing for Decision No. 164/PUU-XX/2023  on Wednesday, January 31, 2024 in the plenary courtroom.

Constitutional Justice Enny Nurbaningsih further read out the Court’s legal considerations for the petition by Anisitus Amanat and Budi Winarno Soejanto (Petitioners I-II). The Court believes that the provision that regulates the government’s authority to determine fees to pay in a state land management agreement by a third party is a form of strengthening the HPL arrangement in guaranteeing protection and legal certainty.

Other parties (third parties) who use a land with management rights must pay an annual fee in accordance with the purpose of its use. Similarly, if the one who uses the land is the holder of land management rights, then the annual fee is also their obligation. Therefore, the annual fee is mandatory for the party utilizing the land, not for the holder of land management rights.

An agreement for land use by other parties (third parties) is not a sale-and-purchase agreement (transfer of rights) as Petitioner II argued when obtaining a right-to-build that has expired. In the event that the right-to-build has expired and is not extended, the Court stressed, the land is returned to the holder of the land management rights or to the state.

“Therefore, a land granted with management rights cannot be used as collateral encumbered by mortgage rights and cannot be transferred to other parties (third parties), unless it is for public interests in accordance with the provisions of laws and regulations,” Justice Enny explained.

Also read:

Notary Questions Annual Fee for Land Management Rights in Job Creation Law

Notary Revises Legal Standing in Case on Land Management Annual Fee in Job Creation Law

The Petitioner argued that the articles impose a mandatory annual fee (UWT) on third parties to pay to the management right holder as compensation for the utilization of a managed land. Based of trust, he handled the renewal of 750 certificates of the right to build (HGB), which is part of lands under management rights (HPL). There were 42 HGB certificates resulting from the renewal, valid until 2024 and 2041, but the rest have been postponed indefinitely by the Semarang City Land Office.

He further explained that certificate owners must get a recommendation letter for the transfer of HGB on HPL because the Government Regulation No. 18 of 2021 on Land Management Rights, Land Titles, Apartment Units, and Land Registration has a provision on mandatory annual fee for third parties who have obtained a portion of land under management rights based on land utilization agreements. The Petitioner then brought this matter to the Supreme Court, and in its ruling, the Supreme Court justices stated that the provision on the recommendation and fee is a norm that has been regulated in the Job Creation Law. The Petitioner questioned why this provision applies retroactively.

He argued that there was a legal vacuum regarding the regulation of land management rights in the Job Creation Law. Therefore, he requested that the Court add a new formulation in a separate article or an additional paragraph to the existing articles.

Author       : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Tiara Agustina
Translator  : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

Wednesday, January 31, 2024 | 15:21 WIB 42