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Assume nothing and trust only proven professionals Excerpt form Bali Sun Newspaper 7/5/2004 Approximately every six months we like to update you on the latest real estate scams and advise what to watch out for. Our slogan has been “assume nothing and trust no one”.
We have refined this logon to ask you to “assume nothing and trust only proven professionals,” for the simple reason that if you trust no-one you will never be able to compete a real- estate transaction. So how do you know who is a proven professional? The answer is to ask friends and expatriates who have lived in Bali for recommendations and If several of these give thumbs up to the same person then you have your answer, be it a real-estate agent or an attorney. Now let us look at the
“assume nothing” part of our warning and let us start with Bali real estate agents who have grown from a few dozen several years ago to hundreds now. Do not assume simply because they have a real estate agency sign hanging over their doorway that they know what they are talking about or even honest. As of now, Bali does not have strict real estate agent laws which are taken for granted in most modern countries. Real-estate agency owners and their agents are not required to pass any tests. Nor
are they required to have a real estate government issued license and this means that anyone can become real estate agents. The result can be disturbing and dangerous at the business level. An example: several years ago an a expatriate approached one of the largest real estate offices in Denpasar who is a representative of one of the top two real- estate agencies in the world. He offered what he said was 25 years of real estate experience, while asking for no salary but an attractive
commission. His prospective employers said they would have to have a meeting and discuss the idea. They also said that most members of the firm were just part time workers who had other jobs like bartending, waiting on tables and clerking in hotels. The expatriate turned around and walked out the door because he realized that at this particular agency he would not be working with professionals. It is an often-repeated story. Many expatriates over the years have entered our offices after
spending exhausting days with these former bartenders and desk clerks who have turned real estate agents overnight. Like the man who was looking for a job, they said they just could not afford to waste their time and there is nothing so time-consuming as being taken on a wild goose chase to look at dozens of properties that do not meet basic requirements. The other complaint that we hear quite often from clients is that these moonlighting real estate agents do not suggest a proper due diligence prior to the purchase of the property.
There is, of course, an inherent difference between buying in Bali and in countries where most expatriates have lived. They have become dependent on governmental protection in acquiring property and here this is less visible. In addition, there are no companies guaranteeing property titles. This means that it is up to you, the buyer, to make sure that the property is free and clear of any problems. Frankly, unless you, the buyer, speak fluent Indonesian you will have a very difficult time talking to the neighbors, or the chief of
the village to find out whether in fact the property is free of encumbrances. Don’t trust the average realtor ether. He has his own agenda and he or she wants to make a quick sale. They can be looking for a commission of several million rupiahs and the last thing on their mind is what the future holds in store for you and your new property. This means that you could be left with a property nightmare. So what do you do? You hire a professional attorney only after you have checked his or her references. This applies to other countries also:
Do not assume because someone is an attorney that he or she is honest. Examples of shady performance abound. Only this past week a female attorney in Bali was apprehended for taking advantage of several German, British and Australian expatriates by promising to marry them so that she could secure some property for them. Not only did she not marry them but she keep their money. So how do you find a good, reliable attorney? You must simply look for good references from several satisfied buyers.
In case you are becoming nervous at these warnings, you should know that there is one real estate law in Indonesia, which we believe is actually better than, most western countries and that is notary law. In the west, notaries are simply there are to witness the signature of buyer and seller of the contract. They require little training and a simple certificate. They are several steps below a proper attorney. In Bali a Notaries is actually a representative of the government and of a higher status than
attorneys are when it comes to real estate law. The only true way to make sure that an agreement will stand up in court is to have it signed and stamped in front of legal notaries. The great thing about notary law is its punishment clause. If a buyer or a seller makes a false statement in writing in the presence of a notary it is a criminal offence subject to a five-year term of imprisonment. It is not a civil offense, which could be fought in court for years. This means that if a landowner signs an agreement before a notary that there are no incumbencies on a property and
it turns out later that there is a mortgage or a lease on it, the buyer can have the police investigate the fraudulent claim. The threat is there: possible confiscation of the property and a jail term. The problem is that this is a long process and many of the persons who were selling barren land are very simple, uneducated farmers who do not understand the full implications of their signature. In the future, we will be discussing many other real estate swindles you must beware of but the bottom line is “caveat emptor” let the buyer beware.
If you’re real -estate agent, attorney or notary cannot offer you good references and, ideally, expatriate references, then turn around and walk the other way. For a list of recommended Notaries and attorneys, contact our office. For more information, or to contribute to our weekly articles contact Lawrence at 284069 or 08123814014. Information and projections are considered reliable but not guaranteed. I Return to Front Page
©BALI
REAL ESTATE AGENTS & DEVELOPERS
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