Background
Facts
Decision
Comment


The Rules on Abandoned Land were updated after the promulgation of the Job Creation Law at the end of 2020. This article discusses the latest regulations on the administration of abandoned land following the enactment of the Job Creation Law and provides an overview of a case that was litigated before the new regulation was enacted.

Background

The steps for the administration of abandoned land include:

  • an evaluation of the land;
  • a notification to the rights holder, requiring them to utilise the land within 180 days;
  • a written warning (three such warnings are issued); and
  • a declaration that the land has been abandoned.

An abandoned land declaration essentially means that:

  • the former owner's land rights are abolished;
  • the former owner's legal relation to the land is terminated; and
  • the land is affirmed to be state land.

The abandoned land must also be vacated by the former rights holder. In several court cases relating to land abandonment, the court has rejected claims regarding an abandoned land declaration. This article reviews one such case, which took place in 2013.

Facts

A developer of industrial areas obtained a right to build (HGB) covering an area of approximately 150 hectares, which the developer had acquired between 1996 and 2004. Of these 150 hectares of land, the developer utilised only 1 hectare.

In 2013, the head of the National Land Agency (BPN) issued an abandoned land determination for most of the land covered by the HGB. The developer objected to the determination and filed a claim with the state administrative court.

Decision

The developer won in the first instance and on appeal, successfully arguing that the determination was legally flawed. Nevertheless, the appeal decision was later annulled by the Supreme Court, which made several important considerations:

  • Article 6 of the Agrarian Law stipulates that all land rights have a social function.
  • The Agrarian Law states that "abandoned land" means land that is intentionally not used.
  • Article 40(e) of the Agrarian Law stipulates that the right to build is abolished if land is abandoned.
  • The developer had utilised only approximately 1 hectare out of the 150 hectares covered by the HGB and the developer had been warned three times previously by the Land Office.

The Supreme Court thus annulled the two lower-court decisions and re-adjudicated the case itself, rejecting the developer's claim for the cancellation of the abandoned land declaration. This decision was later upheld in a judicial review.

Comment

The new regulations issued following the enactment of the Job Creation Law stipulate that abandoned law administration can start earlier (ie, after two years, instead of after three). This shows that the government has tightened the regulations regarding areas of land indicated as abandoned. It may therefore be expected that cases like the one discussed in this article will become increasingly common.

For further information on this topic please contact Eddy Leks at Leks & Co by email ([email protected]). The Leks & Co website can be accessed at www.lekslawyer.com.