What Is a PPJB? Bali Off-Plan Contract Explained
A PPJB is Indonesia's preliminary binding off-plan purchase agreement, signed before a notary. Know what it must include before committing to a Bali villa.
A PPJB (Perjanjian Pengikatan Jual Beli) is Indonesia's preliminary binding purchase agreement for off-plan property. It secures the deal before the villa is ready for a formal title transfer, and under Ministerial Regulation Permen PUPR No. 11 of 2019 it must be drawn up as a notarial deed signed before a licensed Notaris. The buyer has a legal right to seven working days to review it before signing.
The PPJB is not a title transfer. It creates only a personal right between buyer and developer. The AJB (Akta Jual Beli) is the final deed that actually shifts ownership and must be executed before a PPAT (Pejabat Pembuat Akta Tanah) and registered at Indonesia's National Land Agency (BPN). For a Bali off-plan villa, the PPJB typically precedes handover by 12 to 24 months.
Government Regulation PP No. 12 of 2021 adds a key rule: a developer cannot sign a PPJB until the project is at least 20% physically complete and the building permit (PBG) has been issued. Permen PUPR 11/2019 sets the mandatory content, which includes both parties' identities, a full property description with specifications, the purchase price and payment schedule, the agreed handover date, developer guarantees, rights and obligations, cancellation terms, and a dispute resolution clause.
Beyond the statutory minimum, ask your independent lawyer to add milestone-linked payments rather than calendar-date tranches, a daily denda (penalty) if the developer misses the delivery date, a retention holdback at final payment until defects are fixed, and a defect liability window of at least 90 days post-handover. Indonesian law does not require escrow for off-plan residential property. Deposits typically go directly to the developer. Negotiating for funds to sit at a commercial bank or through a notary trust arrangement reduces that risk.
For foreign buyers, the ownership structure must be settled before the PPJB is signed because it determines what deed follows at completion. A leasehold buyer converts to an Akta Sewa. A KITAS holder can convert to a Hak Pakai deed registered at BPN. A buyer using a PT PMA company converts via an AJB to a HGB title. See our ownership structures guide for a full comparison. This is general information, not legal or financial advice. Always engage an independent Indonesian lawyer to review your PPJB before signing.
Frequently asked questions
What is the difference between a PPJB and an AJB in a Bali property transaction?
A PPJB (Perjanjian Pengikatan Jual Beli) is a preliminary binding agreement signed before a Notaris. It creates a personal right between buyer and developer but does not transfer land title. An AJB (Akta Jual Beli) is the final transfer deed, executed before a PPAT (land conveyancer) and registered at BPN, that actually shifts legal ownership. In an off-plan Bali villa purchase, the PPJB comes first, typically 12 to 24 months before handover, and the final deed follows once construction is complete.
What clauses protect the buyer in a Bali PPJB?
Under Permen PUPR No. 11 of 2019, a PPJB must include the handover date, developer guarantees, cancellation terms, and a dispute resolution clause. Beyond those, buyers should negotiate for payments tied to construction milestones, a denda (daily penalty) for late delivery, a retention holdback until defects are fixed, a defect liability period of at least 90 days post-handover, and funds held by a commercial bank rather than deposited directly with the developer. Indonesian law does not mandate escrow for residential off-plan, so that protection must be written into the PPJB itself.
When does a PPJB convert to a full title transfer in Bali?
It depends on the buyer's ownership structure. A leasehold buyer converts from PPJB to an Akta Sewa (lease deed) once the build is complete and all payments are made. A KITAS holder using Hak Pakai converts to a Hak Pakai deed registered at BPN. A foreign buyer holding through a PT PMA company converts via an AJB to a HGB title in the company's name. Under PP No. 12 of 2021, the developer must have at least 20% physical completion and a valid PBG (building permit) before the PPJB can be signed, so the timeline typically runs 12 to 24 months from signing to handover.
Sources
- Permen PUPR No. 11/PRT/M/2019 - BPK RI JDIH: Ministerial Regulation governing PPJB form, mandatory clauses and notary obligations (Tier 1)
- PP No. 12 Tahun 2021 - BPK RI JDIH: Government Regulation defining the PPJB system and the 20% construction completion requirement (Tier 1)
- ILA Global Consulting: Property Handover Delay in Indonesia - buyer rights and denda clauses under Indonesian law (Tier 2)
- Emerhub: Bali Property Investment Guide for Foreign Investors - PPJB process and buyer protections (Tier 2)
This article is general information, not financial, legal or tax advice. Any yield, price or appreciation figures are ranges and not guarantees. Confirm current pricing, ownership structures and regulations with the OMA Townhouse team and a qualified adviser before you commit.