Regulatory Challenges in Addressing Illegal Land Use in Residential Property Transactions

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FORMOSA NEWS - Medan - Overlapping Regulations and Corruption Fuel Illegal Land Use in Residential Property Transactions. Fragmented regulations, double certification practices, and weak institutional oversight are primary drivers behind illegal land use in residential property transactions. This critical finding was revealed in a 2026 study conducted by Mospa Darma from Universitas Tjut Nyak Dhien and published in the International Journal of Law Analytics. The research provides urgent insights into how rapid urban expansion, combined with mismatched land governance systems, undermines legal certainty, harms home buyers, and destabilizes sustainable urban development.

Background and Context
Accelerated urbanization and rapid population growth have dramatically increased the demand for urban housing. However, this surging demand has created severe vulnerabilities in residential property governance. Opportunistic developers, land speculators, and intermediaries frequently exploit administrative loopholes to convert land illegally, erect residential structures in protected conservation zones, or sell properties with fraudulent ownership documents. While countries like Indonesia maintain statutory frameworks such as Law Number 5 of 1960 on Basic Agrarian Principles (UUPA) and Law Number 26 of 2007 on Spatial Planning illegal land utilization remains widespread. Land governance spans agrarian law, environmental regulation, housing policy, and consumer protection. When these legal domain frameworks overlap or lack institutional synchronization, corrupt administrative actors and unscrupulous developers find ample opportunity to bypass urban planning controls.

Research Methodology
To analyze these complex regulatory breakdowns, Mospa Darma at Universitas Tjut Nyak Dhien employed a normative juridical research methodology using a qualitative approach. The study critically examined key legal instruments, including Indonesian agrarian legislation, spatial planning mandates, environmental management acts, consumer protection statutes, and Government Regulation Number 18 of 2021 regarding electronic land registration. Using statutory, conceptual, and comparative legal approaches, the researcher systematically analyzed secondary legal materials, policy documents, and recent academic literature. The analysis focused on identifying recurring structural patterns across regulatory fragmentation, administrative inefficiency, corruption, and consumer vulnerability.

Key Research Findings
The study highlights several systemic weaknesses within current residential land governance frameworks:

• Severe Regulatory Fragmentation: Multiple governmental agencies hold overlapping authority over land registration, zoning approvals, environmental licensing, and housing permits. Developers frequently leverage conflicting institutional databases to secure permits for projects that violate spatial planning regulations.
  
• Persistent Land Registration Vulnerabilities: Incomplete cadastral mapping and reliance on manual record-keeping lead to serious administrative errors. A prime example is double certification, where multiple ownership certificates are issued for a single land parcel due to administrative oversight or corruption.
  
• Administrative Corruption and Abuse of Power: Political influence and bribery routinely compromise permit issuance and spatial planning enforcement. Well-connected developers often obtain residential construction permits within environmentally protected or restricted zones.
  
• High Consumer Vulnerability: Residential property buyers suffer from severe information asymmetry and limited legal literacy. Buyers frequently purchase land without independent legal verification, leaving them exposed to prolonged litigation and total financial loss when land disputes arise.
  
• Implementation Barriers in Digital Governance: Although recent reforms like Government Regulation Number 18 of 2021 introduced electronic land registration to increase transparency, adoption remains uneven due to technological constraints and bureaucratic inertia.
  

Real-World Impact and Policy Implications

The insights from Universitas Tjut Nyak Dhien demonstrate that illegal land use in residential property transactions is a structural governance issue rather than a series of isolated violations. Addressing this challenge requires harmonizing land administration, spatial planning, and consumer protection laws into an integrated, transparent framework. Protecting property buyers requires robust institutional accountability and public access to digital zoning verification tools. By establishing interoperable digital cadastral databases, government agencies can eliminate duplicate land titles and prevent unauthorized land conversions. Strengthening these regulatory protections ensures that good-faith home buyers are protected from property fraud while fostering transparent, sustainable urban growth.

Author Profile
Mospa Darma, S.H., M.H. Universitas Tjut Nyak Dhien. Field of Expertise: Land Law, Administrative Law, Agrarian Law, and Urban Governance Systems

Source
Mospa Darma: Regulatory Challenges in Addressing Illegal Land Use in Residential Property Transactions. International Journal of Law Analytics (IJLA). Vol. 4, No. 2 2026, Hal. 211-218. 
DOI : https://doi.org/10.59890/ijla.v4i2.223
URL: https://journal.multitechpublisher.com/index.php/ijla/index