1. Introduction ~Indonesia Overview ~

Indonesia is friendly toward Japan, whose relationship with Indonesia is long-standing. The acceptance of foreign students and trainees and exchanges through various training programmes are both thriving.

In recent years, not only national governments but local ones are keen to promote product exhibitions, tourist attractions, human resource exchanges and educational exchanges.

According to a BBC international poll, Indonesian people are favourably disposed toward Japanese people. Indonesia is second in the world for Japanese language learners and in future a significant further increase in people-to-people exchange is expected.

Indonesia is an island country consisting of about 13,500 islands. Its population is approximately 240 million and there exist more than 300 ethnic groups. Generally, their national character is modest and tolerant. They have closely united society, motivated by such feelings as kindness and caring for others.

Indonesia’s national principle is to unite and integrate the nation:
Pancasila (originally from Sanskrit) comprises five principles.
1. Belief in the one and only God.
2. Just and civilized humanity.
3. The unity of Indonesia.
4. Democracy.
5. Social justice.

About 90% of Indonesian people believe in Islam, but Islam is not the state religion and freedom of religion such as Christianity or Buddhism is guaranteed to.

Bhinneka Tunggal Ika (originally from Old Javanese) is the official national motto of Indonesia translated as “Unity in Diversity”.

Bahasa Indonesia is the official language of Indonesia and has played an important role in uniting the country

Japanese Real Estate Lease

The Japanese treatment of land and buildings differs from that of most Western countries, where a building and the land it occupies form one estate. The Japanese law of property treats the land and any building on it as separate estates, subject to separate systems of registration. This follows the Japanese tradition that a building is an immovable property independent of its land. In most cases, both estates belong to the same person. If, however, a building is constructed on leased land, problems could arise if the lessor sells the ownership of the land, unless either the lease or the building has been registered.

A lease is an agreement allowing the use of property for payment. Leases over land or buildings may be ordinary renewable leases or fixed-term leases. The assignment of a lease or creation of a sub-lease by the tenant typically requires the landlord’s prior consent.

Ordinary land leases are usually for a minimum term of 30 years, automatically renewed for 20 years on first renewal and for 10 years on later renewals, unless the parties agree not to renew. Ordinary buildings leases are generally for much shorter terms, often one or two years, automatically renewed. Tenants generally have good protection against termination by the landlord. Fixed-term leases of land for residential or commercial use, for at least 50 years, and fixed-term building leases, which may be of any length, must be created in writing. They cannot be renewed but a new lease can be agreed when the first ends.

Rights to property

Rights to property are generally conveyed by contract or succession, or by prescription.
A conveyance of real property must be recorded at the local Legal Affairs Bureau to be valid.
In some cases, where property rights were not recorded because someone acted in breach of trust or in bad faith, or failed in their duty to apply to record a transfer or who obstructed it, the courts will recognise and protect those unrecorded rights.

In England, for example, if someone holds a registered title to land, no-one can challenge this. The state guarantees it.
In Japan the state registers transfers, but does not guarantee that the transferee has a title that cannot be challenged. (No credibility)
Equally, it is only in very exceptional cases, and these are defined in law, that an unrecorded or unregistered property right can be asserted against a registered owner.

The information recorded on a title is legally assumed to be correct and is the best evidence of ownership. Registering a transfer does not guarantee ownership of the real property registered, in the cases of valid but unrecorded rights.
In theory, recording applies to leased property, but in practice registration of leases is not universal.
Recording also required where ownership of real property is claimed by prescription, based on adverse possession.

Japanese property system Part 2

Japanese property law distinguishes between ownership rights and rights of possession. Ownership involves having the title to property. It includes the right to use and enjoy the property, provided no-one else has possession, and to dispose of it in accordance with the law. Ownership rights continue until the property is transferred or lost or as follows:
1) if another person acquires it through conveyance;
2) if another person openly possesses the property for 20 years, by prescription;
3) if the person on open possession truly believed they were acquiring ownership, the period is reduced to 10 years

The right of possession involves exercising control over something and its actual enjoyment. Possessory property rights can be more important than ownership, and a claim to possess property can be made regardless of holding a title. The owner can however regain possession through timely legal action.

Other property rights include usufruct, particularly the rights of tenant farmers. In addition, conditional rights to property may be created when it is used as collateral for a loan or pledge, the most common being a mortgage.

Japanese property system

Most nations follow one of two main legal systems: Common Law (in the USA, Britain, Australia etc.) and Civil Law (in France, Germany, other European countries and also Japan).
In the 19th century, Japan based its Civil Code on the legal codes of France and Germany, both Civil Law systems.

Although it can be jointly owned, Civil Law systems regard property as indivisible in theory, so a transaction transfers ownership completely or not at all.
It makes no distinction between beneficial, legal or equitable titles, as does Common Law.

One analogy is that Civil Law treats property ownership as a box: whoever has the box, owns it. The owner can open the box and transfer the rights inside it to others, but still owns the box. In Common Law, property ownership is like a cake. You can keep the whole cake or divide it into slices. Each slice represents a part of the ownership of the property, as there is division of ownership, not just the transfer of rights.

The Japanese Civil Code bases property law on the principle of ownership. Article 29 of the Japanese Constitution includes the property rights of Japanese citizens:
1) the right to own property is inviolable;
2) property rights shall be defined by law, in conformity with the public welfare; and
3) private property may be taken for public use upon just compensation for this.
The Civil Code prohibits the creation of new real property rights not provided for in the law. The main property rights are ownership, possession, leases and usufruct. Accessory property rights include pledges, mortgages and easements.