A 2026 legal study by Suwardi of the Faculty of Law at Narotama University, Indonesia, highlights ongoing risks faced by apartment buyers who enter preliminary sale agreements with property developers. Published in the International Journal of Global Sustainable Research, the research finds that although Indonesian law formally protects consumers, enforcement gaps and contractual imbalances continue to leave buyers vulnerable—especially in pre-construction property transactions.
The findings matter as Indonesia’s urban population grows and vertical housing becomes a primary solution to limited land availability. Apartments are increasingly marketed before construction begins, making early legal agreements a crucial determinant of buyer security.
Rising Apartment Demand and Legal Risk
Housing is recognized as a constitutional right in Indonesia, yet rapid urbanization has intensified the demand for apartment units. Developers commonly rely on a pre-selling system, allowing them to market properties based on design plans and promised specifications.
While this approach helps developers secure project financing and offers buyers lower prices, it also creates significant legal exposure. Buyers often commit funds before the building exists, meaning delays, specification changes, or project failure can result in financial loss without guaranteed recourse.
At the center of these transactions is the Sale and Purchase Binding Agreement (Perjanjian Pengikatan Jual Beli, or PPJB)—a preliminary contract that outlines payment terms, building specifications, delivery schedules, and sanctions for breach.
However, Suwardi notes that PPJB documents are frequently drafted unilaterally by developers as standard contracts, limiting buyers’ ability to negotiate and creating unequal bargaining power.
Methodology in Brief
The study applies normative legal research, focusing on Indonesia’s positive legal framework rather than empirical field data. Suwardi examined statutory regulations including:
- The Indonesian Civil Code
- Law No. 8 of 1999 on Consumer Protection
- Law No. 20 of 2011 on Flats
- Ministerial Regulation of Public Works and Housing No. 11/PRT/M/2019
Secondary materials such as legal textbooks, journals, and expert opinions were also analyzed to interpret contractual principles and consumer protections.
Key Findings
The research identifies several structural weaknesses in how PPJB agreements operate in practice.
Major insights include:
- Legal protection exists but is inconsistently implemented. Regulations require developers to meet specific conditions before marketing apartments, yet violations remain common.
- Buyers often occupy a weaker legal position. Developers typically possess greater financial resources and legal expertise, enabling them to impose clauses that limit liability or transfer risk.
- Preventive and repressive protections are available. Preventive measures include mandatory permits and accurate project information, while repressive mechanisms involve litigation or dispute resolution bodies such as the Consumer Dispute Resolution Agency (BPSK).
- Evidence strength depends on contract form. Notarial PPJB agreements carry stronger evidentiary power than privately drafted contracts, which are widely used.
- Court precedent favors consumers. Indonesia’s Supreme Court decision No. 1796 K/Pdt/2017 affirmed that developers must refund buyers if projects fail, reinforcing contractual fairness.
The study also highlights a regulatory requirement that developers should only offer PPJB contracts after at least 20 percent construction progress and the issuance of building permits. In reality, many projects are marketed earlier, increasing the risk of default.
Implications for Policy and Property Markets
Suwardi argues that Indonesia’s property sector requires stronger oversight to ensure that legal protections translate into real-world security.
Suwardi of Narotama University writes that “legal protection for apartment buyers is normatively regulated… however, the implementation of these provisions has not fully provided effective protection for buyers,” emphasizing the need for stronger supervision and consistent law enforcement.
The study recommends several policy improvements:
- Strengthening government monitoring of developers
- Requiring escrow accounts to safeguard consumer funds
- Ensuring notaries verify that PPJB clauses comply with statutory provisions
- Promoting greater legal awareness among buyers
Such measures could improve contractual balance and prevent disputes that are often costly and time-consuming.
Why the Study Matters Now
Indonesia’s property market continues to expand alongside urban economic growth. Apartments are no longer viewed solely as housing but also as investment assets, drawing middle-class buyers who may lack sophisticated legal knowledge.
Without stronger enforcement, the gap between formal regulation and market practice risks undermining consumer confidence in the property sector.
The research concludes that PPJB agreements remain a critical legal instrument—but their effectiveness depends on fair contract substance, balanced rights and obligations, and reliable enforcement mechanisms.
Ultimately, reinforcing these protections could foster greater legal certainty, benefiting both consumers and responsible developers while supporting sustainable urban development.
Author Profile
Suwardi, S.H., M.H. is a legal scholar at the Faculty of Law, Narotama University, specializing in civil law, contract law, and consumer protection within Indonesia’s property sector. His work focuses on strengthening legal frameworks to ensure fairness in commercial transactions.
Source
Article Title: Review of the Legal Protection of Apartment Buyers Through Sale and Purchase Reminder Agreements (PPJB) for Property Developers
Journal: International Journal of Global Sustainable Research (IJGSR)
Year: 2026
DOI: https://doi.org/10.59890/ijgsr.v4i1.151
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