Why Due Diligence Matters
Property fraud and disputes are unfortunately common in Bali. Proper due diligence protects your investment and avoids costly legal battles later.
The Essential Checklist
1. Land Certificate Verification
Check:
- [ ] Certificate type (SHM, HGB, Hak Pakai)
- [ ] Certificate authenticity at BPN (land office)
- [ ] Name matches seller
- [ ] No liens or encumbrances
- [ ] Plot boundaries match physical property
2. Seller Verification
Check:
- [ ] ID card (KTP) matches certificate name
- [ ] Family card (KK) for inheritance properties
- [ ] Death certificates if inherited
- [ ] Power of attorney if representative
- [ ] Spouse consent (required for married sellers)
3. Tax Compliance
Check:
- [ ] PBB (property tax) paid up to date
- [ ] NPWP (tax ID) of seller
- [ ] No outstanding tax disputes
- [ ] Tax value (NJOP) confirmation
4. Zoning & Permits
Check:
- [ ] Zoning designation matches intended use
- [ ] Building permit (IMB) exists and matches building
- [ ] Environmental permits if required
- [ ] No violations or demolition orders
- [ ] Access road is legal (not private)
5. Physical Inspection
Check:
- [ ] Property matches listed specifications
- [ ] Structural condition assessment
- [ ] Utilities (water, electricity) functioning
- [ ] Boundaries match certificate
- [ ] No encroachments from neighbors
6. Legal Review
Check:
- [ ] Previous ownership history
- [ ] No ongoing disputes
- [ ] No court cases involving property
- [ ] Contract terms are standard and fair
- [ ] Exit clauses are reasonable
Red Flags to Watch For
⚠️ Immediate concerns:
- Seller refuses BPN verification
- Mismatched names on documents
- Pressure to skip due diligence
- Cash-only demands
- No notary involvement
- Unusually low price
Using Professionals
Recommended team:
- Notary (PPAT) - for document verification
- Lawyer - for complex transactions
- Surveyor - for boundary confirmation
- Building inspector - for structural assessment
Timeline
Standard due diligence takes 2-4 weeks:
- Document collection: 1 week
- BPN verification: 3-7 days
- Legal review: 1 week
- Physical inspection: 1-2 days
Never rush this process. A seller who won't wait likely has something to hide.