Red Flags in LCBSE Deals

Common Warning Signs

1. Nominee Arrangements

The Problem: Some sellers offer to put the property in an Indonesian "nominee's" name on your behalf.

Why It's Dangerous:

• Completely illegal in Indonesia
• No legal recourse if nominee disappears
• Property can be seized by nominee's family
• You have zero legal protection

What to Do Instead: Use proper PT PMA structures.

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2. Pressure to Skip Due Diligence

Red Flags:

• "Another buyer is ready to sign"
• "This price is only valid today"
• "No need to check at BPN, I'm trustworthy"
• "Due diligence takes too long"

Reality: Legitimate sellers understand and expect due diligence. Anyone avoiding it likely has something to hide.

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3. Cash-Only Transactions

The Problem: Demands for cash payments, especially large amounts.

Why It's Dangerous:

• No paper trail
• Difficult to prove payment
• Potential money laundering
• Tax evasion red flag

Proper Practice: Use bank transfers with clear documentation.

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4. Document Inconsistencies

Watch For:

• Names don't match exactly
• Certificate copies only (no originals)
• Altered or unclear documents
• Missing spouse signatures
• Outdated certificates

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5. Too-Good-To-Be-True Pricing

Reality Check:

• Beachfront in Seminyak for $200K? Suspicious.
• "Urgent sale" at 50% below market? Investigate.
• "Owner must sell today"? Red flag.

Extremely low prices usually indicate:

• Legal problems with property
• Undisclosed issues
• Outright fraud

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6. No Notary Involvement

The Problem: Seller wants to handle everything "directly"

Why It's Dangerous:

• No legal oversight
• No professional verification
• No proper documentation
• No protection for buyer

Always: Insist on a licensed PPAT notary handling the transaction.

How to Protect Yourself

Never skip due diligence - No exception

Use licensed professionals - Notary, lawyer

Verify everything at source - BPN, tax office

Bank transfers only - Keep documentation

Take your time - Pressure is a warning sign

Trust your instincts - If something feels wrong, walk away