Most property buyers sign the PPJB (Perjanjian Pengikatan Jual Beli, the binding sale and purchase agreement) during a stressful, exciting moment when the last thing they want to do is read fine print. Marketing has been great, the unit looks good, and the handover timeline sounds reasonable. So they sign.
That's exactly when careful reading matters most. The PPJB is the legal foundation of your purchase, defining the developer's obligations, your rights, and the remedies available if something goes wrong between signing and key handover. Understanding what should be in it (and what's missing if it isn't) is how you protect yourself.
The PPJB Is a Contract, Not a Formality
Under Indonesian property law, particularly PP 12/2021 on the implementation of the Housing and Settlements Law, developers selling off-plan units (units not yet built or not yet certified with an SHM) are required to use a PPJB. The contract must be made before a notary and meet specific content requirements.
In practice, the PPJB is often treated like a standard template that gets signed quickly. But its clauses, and crucially the clauses that are absent, have real financial and legal consequences. Here are the six you should review closely.
Clause 1: A Specific Handover Date
The PPJB must state a concrete, calendar-specific date for key handover. Not "approximately Q3 2027," not "within 24 months of signing." Give it an actual calendar date. The specific date is what triggers the late penalty mechanism (see Clause 2).
If the contract says "the developer will make best efforts to hand over by…" or uses similar hedging language, that clause is almost meaningless in a dispute. Push for a hard date, or get written clarification on what triggers the late penalty if a hard date isn't given.
Clause 2: A Developer Late Penalty
This is the most commonly weakened or missing clause in practice. Indonesian consumer protection frameworks support a penalty of 1/1000 (0.1%) of the total transaction value per calendar day of delay. For a Rp 700 million property, that's Rp 700,000 per day.
The penalty serves two purposes: it compensates the buyer for the financial cost of living elsewhere or continuing to rent, and it creates a real incentive for the developer to deliver on time. A PPJB with no late penalty or a trivially small one gives the developer nothing to lose by delaying.
Check the clause: does it specify the daily rate? Is it tied to the hard handover date from Clause 1? Does it cap at a low number?
Clause 3: Detailed Building Specifications
The PPJB must reference, or attach as an annex, the full building specification that the developer is committed to delivering. This includes structure, roofing, wall materials, flooring type, door and window frames, electrical capacity, plumbing, and finishes.
Why it matters: if the spec says "ceramic floor tile" and you receive a different tile on handover, you have a documented basis for a claim. Without a spec attachment, "as shown in the brochure" is the only reference, and brochures are typically disclaimed as illustrations only.
When reviewing: compare the attached spec against what the marketing materials show. Any discrepancy between the two should be resolved before you sign.
Clause 4: Buyer Rights on Material Changes
Developers sometimes need to change specifications during construction. A supplier runs out of a particular tile, an architectural detail proves impractical, building codes require a modification. A well-drafted PPJB gives the buyer the right to be notified before any material change to the specification, and in some cases the right to reject the change or receive compensation if the substitution is of lower quality or value.
Watch for language that gives the developer unilateral authority to "adjust specifications as necessary." This clause should specify what counts as a material change, what notice the buyer receives, and what the remedy is.
Clause 5: Escrow Account or Payment Separation
Per PP 12/2021, developers who collect advance payments (uang muka, booking fees, or installment payments) from buyers before the unit receives its Building Permit (IMB/PBG) and land certificate (SHM/SHGB) are required to hold those funds in an escrow or designated account, separate from general operating funds.
In practice, this protection exists because if a developer faces financial difficulties before delivery, a properly segregated escrow gives buyers a legal claim to return of funds. Ask the developer or notary whether this is in place, and confirm the account details in the PPJB or its annexes.
Clause 6: A Clear Cancellation and Refund Mechanism
Both sides should be able to exit. The PPJB should specify:
- What triggers a buyer's right to cancel (e.g., developer delays beyond a set threshold, failure to obtain required permits)
- What triggers a developer's right to cancel (e.g., non-payment)
- The refund amount and timeline in each scenario, including whether the developer can retain any portion of payments made
- The process for resolving disputes (typically BPSK or civil court under Indonesian law)
A PPJB that only specifies what happens if the buyer defaults, without specifying what happens if the developer defaults, is a one-sided contract.
Kingspoint by Mandiri Development is a legally compliant development. Land certificates, building permits, and PPJB processes are in order. If you'd like to review the documentation before committing, ask the marketing team to walk you through the legal status of the project.
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The Kingspoint team can provide full documentation on the project's legal status, including permits, certificates, and PPJB structure, before you make any commitment.
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