Build & Villa Projects
A villa that is being built is a project, not a purchase.
The land right, the building approval, the construction contract and the management arrangement afterwards are four separate pieces of work. A problem in any one of them is felt in the other three.
Most of what goes wrong on a Bali build is not exotic. It is a contractor paid too far ahead of the work, an approval obtained for something other than what was drawn, or a management agreement that quietly takes the owner’s control away.
We do two things at once on a build. The legal work, with AFS Counsellors at Law advising under Indonesian law. And the project itself — finding the land, assembling the architect, contractor and project manager, and holding them to what they signed.
Scope
We can assist with the following, and more.
Before the build
- The land right the project needs, and whether yours supports it
- Zoning, and whether a villa is a permitted use on that parcel
- Building approval, and that the approval matches the drawings
- Environmental and local requirements that apply to the site
Contracting
- Construction contracts, scope and specification
- Payment against milestones rather than against dates
- Retentions, defects liability and practical completion
- Variations, priced before they happen rather than after
Buying off the plan
- What is actually being sold, and by whom
- Whether the developer holds the title they are selling from
- Deposit protection and staged payments
- What you are left holding if the project stalls
After completion
- Villa management and rental agreements
- Licensing where a property is let to guests
- Tax on rental income, with your advisers in both countries
- Selling, and who is permitted to buy the right you hold
Off the plan
Check what the developer holds before you pay them.
An off-plan villa is a promise to build something on land, and the promise is worth exactly as much as the developer’s right to that land and their ability to finish.
The checks are not complicated: whose name is on the certificate, what the approval allows, whether payments are tied to work done or to dates, and what you hold if the build stops halfway.
They are also not usually done, because the brochure is persuasive and the deposit is due on Friday. Done properly the review takes days.
Questions
Frequently asked questions.
Can we build on land we lease?
It depends on the right you hold and what the lease permits. The building right and the land right have to be consistent, and that is checked before design rather than after.
What approval does a villa need?
A building approval that matches what is being built. An approval for a dwelling does not cover a commercial rental operation, and the mismatch surfaces at the worst possible time.
Can we let it to guests?
Short-term letting is regulated and licensed, and enforcement has increased. Answer it before the business case, not after the build.
The contractor wants most of the money up front.
That is the single most common way an owner loses control of a build. Payment against verified milestones is the answer, and it belongs in the contract.
Who manages it when we are not there?
A management operator, under an agreement worth reading closely. Some of them take rights that are difficult to get back.
Do you build the villa yourselves?
Not with our own hands. We put the project together — land, title, approvals and contracts — and bring in the architect, contractor and project manager, then hold them to their agreements. Indonesian legal advice is AFS’s.