To IMB or Not IMB? Is Not a Valid Question

Buying property in Bali
Buying property in Bali
Image by Marten Newhall on Unsplash.

A couple of weeks ago, I drove out to my first ever meeting with a prospective vendor. I’ll admit I was a bit nervous and maybe I didn’t make an ideal first impression, but the real problem wasn’t how I arrived I’m oddly relieved to say, the problem was with the vendor and his mindset.

The first red flag popped up just after we’d walked the property. He seemed to be genuinely interested in having me sell the house, so I presented a copy of our standard listing agreement. Now I don’t have a lot of experience with vendors, this was my first time remember, but I would have thought that if a prospective seller says something along the lines of “it’s my personal principle to never sign anything legally binding with an agency,” any agent worth their salt would be curious, even suspicious, as to why that is. Sure, he was interested in having me sell his house, just not as a Seven Stones agent? Spider senses began to tingle.

We stepped out of the property. Before I could get to the nuts and bolts of why he wouldn’t sign an agreement, I noticed there wasn’t an IMB plate tacked onto the front of the property. The IMB by the way, is proof of a building permit and all properties that have them, display them. I figured this was the reason he was so reluctant and I was half expecting an excuse.

But I asked anyway, because that’s what I do.

“So have you got the IMB for this house?” I asked.

“Nope.”

He wasn’t even trying to deny it! There wasn’t an ounce of hesitation when he openly admitted his property was illegal.

Well, this is Bali and every so often you’ll come across these types: people who are clearly violating Indonesia’s laws and regulations, but aren’t very much afraid of admitting it because they know – and you should also know – that just about half of every law passed in this country is an ethical grey area. One needs to look no further than the way people drive on the island to understand that!

He went on to explain, “it’s pretty much impossible for me to get an IMB out here …”

Here it comes I thought – the justification.

“… because this land, that I bought and built on, lies on a green belt.

He wasn’t even trying to give a bureaucratic excuse. He was just telling me more about how illegal his place was.

So, not only did he build a house that he’s now trying to sell, perhaps to some unsuspecting folks who would have to deal with any future consequences to his actions, he also purchased and developed a piece of land that’s supposed to be conserved as a farmer’s beautiful plot of rice paddies! And he knew it!

I was gobsmacked.

For some people there are attractions and advantages of developing properties illegally here in Bali. I guess it makes sense if you’re that way inclined. The process of getting an IMB approved by the government can be very tedious, consuming not only a lot of time and energy, but also money. And the money is an important consideration especially considering our government has a bad rep amongst its own people as well as expats and tourists.

There still seems to be a correlation between the amount of money you give to an official and the likelihood of having a permit approved (or not) in a timely manner. My colleagues tell me a few years ago the vendor of this particular story could have taken a brown envelope stuffed with cash to a government official (or four depending on the size of the envelope) and he would have got the IMB, illegal or otherwise, in a green belt or not, quite easily.

Thankfully, over the last few years the government, both local and national, has cleaned up its act (or at least tried to) and it’s no longer the wild-west. There are proper procedures in place, including zoning, and there are people like me who see the advantages and benefits of rules and regulations and want to see things change for the better.

From where I stand, buying land illegally and building illegally is wrong. There should be no question of doing either. It doesn’t matter if it makes prices more ‘competitive.’ It doesn’t matter if it’s dirt cheap. It’s wrong. Plain and simple.

I’ll show myself out.

If you’d like to learn more about owning property in Bali and Indonesia get in touch with us today through hello@sevenstonesindonesia.com

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.