"(1) At the time this Board Regulation is valid, the provisions in principle permits, Capital Investment registration, investment registration, investment permits, business licenses, or commercial or operational licenses shall remain valid as long as they do not contradict the provisions or are not specifically regulated in this Board Regulation. This new zoning would prevent you from buying up empty lots and expanding to prevent further competitor development of the area.Y ou may often hear the term grandfather clause, but what exactly does grandfather clause mean when such clause is specifically linked to investment law in Indonesia? Generally, g randfather clause is an exception principle in a contract that allows the previous regulation to be applied into some situation or context that is currently on going when a new regulation was made for all future situations and contexts.įurthermore, is there any clear legal basis that regulates this grandfather clause in investment law in Indonesia? The grandfather clause is regulated in article 68 paragraph 1 and 2 of the Regulation of the Head of the Investment Coordinating Board Number 1 of 2020 (“PerKa BKPM 1/2020”), which reads as follows: A cheap sale could signal a “carpenter’s choice” situation where the updates that will need to be done cost more than the buy price and the current owner simply wants to get rid of that part of their portfolio.Īs a property buyer, another item that you need to keep a look out for is if you opt to buy a property that is not residential, but the surrounding area starts to further develop and the area is zoned as residential. If you are exempt from certain changes, you may not want to enact grandfather rights though.As mentioned, it may be more beneficial to be able to keep your property and home fully updated as this helps with safety and compliance and depending on the needed upgrades could increase your overall property value as well.Īs a property buyer, this means seeing when updates were last done and what may need to be done. Having an unsafe property leaves a great deal of liability resting on the head of the property owner, so you will want to be sure you have your bases covered. This means as a property owner you will need to see what legally must be updated no matter what is already existing. Other issues may involve insulation, heating, or other nuances of a home or building.
#The grandfather clause law code
As a result, many of those buildings soon crumbled during massive earthquakes due to not being up to the new code and many people had to write off the losses. Building compliance changed to be able to withstand increasing seismic activity, but existing buildings did not need to update. One scenario where it was allowed was in Japan in the 1980s. This is important to keep in mind when you are investing in property.
This is because zoning laws and other legislation are constantly shifting, so this does allow for buildings to not have to constantly need to be updated and changed to meet new laws.Īs mentioned, grandfather rights can be carried out on a case to case basis. Grandfather rights are very commonly applied to a property.
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