Mortgage registration process

The registering of mortgage in Indonesia is discussed.

Outline
A. Registration process
B. Discharge of mortgage

A. Registration of mortgage rights – Articles 13 – Article 14 1996 Mortgage Law.

Registration is done at the Land Office.

The Land Deed Making Official (Pejabat Pembuat Akta Tanah – PPAT or commonly referred to as “notary”) must send, within 7 days of signing, the Deed of Granting Mortgage Rights (APHT) and necessary documents to the Land Office:
• Cover letter from the PPAT made in duplicate and contains a list of the types of letters submitted;
• Application letter for registration of Mortgage Right from the Mortgage Beneficiary;
• Photocopy of identity letter of giver and holder of Mortgage Right;
• Original certification of land rights or ownership rights to flats which are the object of Mortgage;
• The second copy of deed of granting Mortgage;
• A copy of the deed of granting Mortgage Rights that has been initialed by the relevant PPAT to be ratified as a copy by the Head of the Land Office for the making of Mortgage Certificate; And
• Proof of payment of Mortgage registration fee.

The Land Office will issue the  Mortgage Book and records it in the land title book – this being the creation of the object of the Mortgage Right and endorse the note on the relevant Land Title Certificate.

The Mortgage Book is dated the seventh day after the complete receipt of the documents required for registration. If the seventh day falls on a holiday, the relevant land book is dated the next working day.

The Mortgage comes into legal existence on the date the Mortgage Book was made.

The Land Office issues a Mortgage Certificate containing irah-irah, “For the sake of Justice Based on Belief in the One and Only God”, so that the certificate has the same executive power as a court decision and is then handed over to the Mortgage holder.

B. What happens when the mortgage is repaid?

The term Roya is commonly understood to be the act of discharging or cancelling a mortgage.

When the debt has been fully paid by the Debtor, the Bank will issue a Paid Certificate  accompanied by  a Roya Letter addressed to the Land Office (BPN) where in the letter there is a request that the Mortgage record be deleted immediately.

Mortgage Certificate will be handed back to the property owner/debtor who would  submit the request for the cancellation of the  Mortgage registration at the Land Office.

With this done, the land title certificate will be return clean with  the mortgage  entry extinguish.

The abolition of Mortgage Rights on the certificate is known as Roya .

This is the reason of the importance of taking land security through a mortgage (hak tanggungan) that is recognized under Law Number 4 of 1996 concerning Mortgage Rights on Land and Objects Related to Land.