Building Trust

The detention this week of the British head of a well-known and reputable property company here is another instance of deals going very badly wrong and the industry should consider establishing an independent mediator to independently resolve disputes out of court.

Mark Tuck is being interrogated under detention for his part in a land-acquisition contract that the buyer claims resulted in neither certification nor a full return of funds. The case (if there is one) is headed for the Denpasar District Court for a panel of judges to decide who erred, if anyone. It follows a progression of recent ceases involving property companies whose principals have been jailed.

For a small island with very limited space, the large amount of property companies operating here seems inversely proportional. Yet from the accounts we hear, most appear to be faring well as foreign interest in Bali’s property sector remains strong. Realtors will be further encouraged by news this week of more surveys showing that Bali is many people’s preferred holiday destination.

To safeguard this sector all involved should enter discussions under an umbrella body much the same as the Bali Hotels Association, which represents the top-starred hotels on the island. Such an organisation could then devise an independent tribunal that would hear disputes and seek to resolve them without causing harm to property firms or their clients, as the never-ending legal cases having been doing.

A mediator body for the property sector is also required in a country where there is often little legal certainty and whose rules are frequently unclear to a mainly foreign clientele. To this end it would operate an advice service to people thinking of making property or land purchases. Staffing could be provided by funding generated by membership in the organisation. When property firms in Bali sell homes for upwards of a million dollars, an annual fee to protect their business would be money well spent.

There are too many stories of people being ripped off by alleged cowboy real-estate operators in Bali, and the growing number of court cases adds to an overall and growing sense that too much trust must be placed on the side of the prospective buyer, that they must just accept what they are told at face value.

Establishing organisations to instil a sense of security would be an early step to mitigate this. Allowing foreigners to purchase real estate outright in their own names, thus avoiding the underhand scheme that is the current shambles, is another issue. It is one that must eventually be granted. The current irresolute government in Jakarta should find the means to make this move.

Filed under: Editorial

2 Responses to “Building Trust”

  1. Mark Ulyseas Says:

    The editor of The Bali Times must be congratulated for saying what many self respecting expats and lovers of Bali have known all along but are afraid to speak out because of retribution from person/persons unknown.

    I have overheard ‘talk’ about property transactions in Bali that centers on fiddling of paperwork, mishandling of cash transactions, downright abuse of the prevailing ethos and disregard for all norms of Indonesian Law. This has resulted in the burgeoning of an unregulated business that every expat washed ashore, with a devious mentality supported by a corrupt system, can avail of with impunity.

    It would be interesting to conduct an intensive survey of the registered owners of property in Bali. Proxy owners are flourishing. Often it is overheard that these proxy owners are (sometimes) visited by the taxman. The result? They go running to the registered owners and shell out thousands of dollars to them and the problem goes away.

    On visiting a home of an expat in Bali I was introduced to the “owner” of the property – the gardener! The value of the property in question is said to be worth over half a million dollars!

    I had written a couple of articles (http://www.pagegangster.com/p/mfW6t/12/) in the Property Report published from Singapore about the purchase of property in Bali and the rules and regulations thereof. Apparently (some) buyers are hell bent on circumnavigating the law to purchase a piece of paradise. They are so desperate that they even buy land in the name of a local believing that this is Camelot. In this way, millions of dollars are invested in real estate in Bali and registered in the names of drivers, house help and sometimes dead persons.

    So when disputes arise particularly when a property is changing hands from one “proxy” to another, the registered owner often comes forward for a slice of the pie. Paperwork overlooked or simply not done makes the deal even murkier. All it takes is a small misunderstanding to bring everything to light. Then the Bali Police are left with the enormous task of disentangling the mess and finding the culprit, which is often the “system”.

    A self regulating body must be instituted to prevent such unfortunate incidents. But this cannot happen for there appears to be a benign corrupt system that nurtures and promotes insidious buying and selling of property in Bali.

    Recently a journalist friend from the Germany telephoned me to enquire about such matters. I declined to comment as I feel a cursory glance of the prevailing methods of purchasing property in Bali and the ‘ways and means’ utilized to arrive at possession of a dream plot, in most cases, is riddled with fudging and legal discrepancies .

    The property market is infected with corruption and downright cheating. One can list the “offenders” here but what will happen? Nothing. And this is because the “system” is the personification of avarice and sleaze.

    The Government of Indonesia will have to be proactive in this matter before Bali is completely lost to carpetbaggers and their
    counterparts in Bali.

    Om Shanti Shanti Shanti Om

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