Land Due Diligence in Lombok: 8 Must-Do Things Before Purchasing Properties to Avoid Scams

Lombok has become one of Indonesia’s top investment hotspots, attracting foreign investors looking to buy land for tourism, real estate, or personal use. With its pristine beaches, growing infrastructure, and rising demand for high-end resorts and villas, it is no surprise that many individuals and businesses are eager to secure property on this beautiful island. However, purchasing property in Indonesia, especially as a foreigner, comes with legal complexities, bureaucratic hurdles, and potential risks that could result in significant financial losses if not handled properly.

Conducting land due diligence in Lombok is crucial to avoid scams, land disputes, and legal issues that could jeopardize your investment. Without proper verification, buyers risk encountering fraudulent sellers, unclear land titles, or zoning restrictions that prevent them from using the land as intended. By ensuring that every legal aspect is thoroughly reviewed before finalizing a purchase, investors can secure their property safely and confidently.

This guide will walk you through everything you must do before buying land in Lombok, highlighting the importance of land due diligence in Lombok and the essential steps to protect your investment. Whether you are purchasing land for personal use, commercial development, or as a long-term investment, following a structured due diligence process will help you navigate Indonesia’s property laws and avoid potential pitfalls. By understanding the key factors involved in land due diligence in Lombok, you can make informed decisions and maximize the security and profitability of your investment.

1. Understanding Why Land Due Diligence in Lombok is Essential

Before purchasing any property, conducting land due diligence in Lombok is a critical step that ensures you are making a secure and legally sound investment. The process involves verifying land ownership, checking legal documentation, and assessing potential risks that could affect your rights as a property owner. Many investors, particularly foreign buyers unfamiliar with Indonesia’s legal landscape, face serious challenges when skipping this step. Some of the most common issues include:

• Fake ownership claims – Unscrupulous sellers may attempt to sell land they do not legally own, using forged documents to deceive buyers. Without proper land due diligence in Lombok, you may end up purchasing land from someone who has no legal right to sell it.
• Double sales – A single plot of land may be sold multiple times to different buyers, leading to disputes and legal battles. This is a common scam that can cause significant financial losses if not identified early.
• Illegal land use – Certain properties may be built on protected, disputed, or government-owned land, making them impossible to legally develop or use. Without verifying zoning laws and land status, investors risk purchasing land that cannot be used as intended.
• Missing permits – All construction and property use in Lombok require official permits that comply with local and national regulations. Purchasing land without confirming that the necessary permits are in place can result in delays, fines, or even demolition orders from authorities.

By ensuring proper land due diligence in Lombok, investors can safeguard their investment, avoid costly legal disputes, and gain peace of mind that their property purchase is legitimate and secure. Taking the time to conduct thorough checks can mean the difference between a successful real estate investment and a financial disaster.

2. Verify the Land Certificate and Ownership

One of the most crucial steps in land due diligence in Lombok is verifying the authenticity of the land certificate and confirming legal ownership. Indonesia has various types of land titles, and understanding which one applies to your purchase is essential to avoid potential legal complications. Since land ownership laws in Indonesia differ for locals and foreigners, it is vital to ensure that the property you intend to buy aligns with the legal framework.

Types of Land Certificates in Indonesia:

• Hak Milik (Freehold Title) – This is the highest form of land ownership in Indonesia, granting full ownership rights. However, only Indonesian citizens can hold a Hak Milik certificate. Foreigners cannot own freehold land but may use other legal structures to gain rights over the property.
• Hak Pakai (Right to Use) – This is the most common form of land tenure available to foreign investors. It allows foreigners to lease and use the land for a specified period, typically up to 80 years (30 years, extendable for 20+30 years). This certificate is often used for residential or tourism-related properties.
• Hak Guna Bangunan (HGB – Right to Build) – This title is granted to individuals or companies to develop and use land for business or commercial purposes. The land itself remains state-owned, but the titleholder has the legal right to build and operate businesses on it.

How to Verify a Land Certificate:

1. Request a copy of the land certificate from the seller and review its details carefully. Ensure the name on the certificate matches the seller’s identification documents.
2. Cross-check the land certificate with BPN (National Land Agency) in Lombok to confirm authenticity. BPN can provide official records on whether the land has legal issues, multiple ownership claims, or zoning restrictions.
3. Check for disputes, unpaid taxes, or encumbrances on the property. Outstanding tax obligations, hidden mortgages, or legal conflicts can affect the transfer of ownership and lead to serious financial and legal consequences.
4. Verify land boundaries and physical conditions by conducting a land survey. Some sellers may attempt to sell land that extends beyond their legally owned boundaries, causing disputes with neighboring landowners.

Neglecting this part of land due diligence in Lombok can result in severe consequences, including financial losses, legal battles, and even the loss of ownership rights. By thoroughly verifying land certificates and ownership status, investors can ensure that their property purchase is legitimate, secure, and free from legal complications. Taking the extra time to confirm all details will help protect your investment and provide peace of mind.

3. Conduct a Land History Check

A crucial step in land due diligence in Lombok is verifying the ownership history to avoid legal disputes or fraudulent transactions. Unclear ownership transfers, inheritance claims, or overlapping sales can cause serious problems for investors.

Key Aspects to Check:

• Multiple Sales Records – Frequent resales may indicate legal issues or fraud. Verify past transactions through the National Land Agency (BPN).
• Inheritance Claims – Ensure all heirs have legally released their rights to prevent future disputes.
• Land Disputes & Court Cases – Check for unresolved conflicts, boundary issues, or illegal sales that could affect ownership.

How to Verify Land History:

1. Request an Ownership History Report from BPN or the local village head (Kepala Desa).
2. Hire a Notary (PPAT) or Legal Consultant specializing in land due diligence in Lombok to review records.
3. Consult Local Authorities & Neighbors to confirm the land has no hidden claims or disputes.
4. Cross-Check Maps & Certificates to ensure there are no overlapping ownership claims.

Skipping this step in land due diligence in Lombok can lead to costly legal troubles. A thorough history check helps secure a legitimate and risk-free property investment.

4. Confirm Zoning and Land Use Regulations

A crucial part of land due diligence in Lombok is verifying zoning regulations before purchasing a property. Each area is designated for specific purposes, such as residential, commercial, agricultural, or tourism. If the land does not match your intended use, you may face legal restrictions, fines, or even demolition orders.

Why Zoning Verification is Important

• Legal Compliance – Using land for the wrong purpose can result in legal action.
• Business Viability – Investors must ensure the land is permitted for tourism, hospitality, or commercial use.
• Resale Value – Land in restricted zones may be harder to sell in the future.

How to Check Zoning Regulations

1. Visit the National Land Agency (BPN Lombok) – Request an official zoning map and land use certificate.
2. Consult Local Authorities – Check if there are future zoning changes that could impact the land.
3. Hire a Notary or Legal Expert – Professionals specializing in land due diligence in Lombok can confirm zoning status and ensure compliance.
4. Investigate Rezoning Possibilities – If your land isn’t in the correct zone, find out if rezoning is possible, the process involved, and any additional costs.

By confirming zoning regulations as part of your land due diligence in Lombok, you can avoid costly mistakes and ensure your property meets legal and business requirements.

5. Check for Encumbrances and Land Taxes

A crucial part of land due diligence in Lombok is verifying whether the land has any outstanding financial obligations, such as unpaid taxes, mortgages, or legal claims. Overlooking this step can lead to unexpected financial burdens, making the investment riskier.

Key Financial Checks:

• Unpaid Land Taxes – The seller must have fully paid all land taxes before transferring ownership. Delayed or unpaid taxes can cause legal complications, preventing the registration of your property.
• Mortgages or Liens – If the land has been used as collateral for a loan, it may not be legally transferable until the debt is settled. Always verify if there are existing mortgages, as this could affect ownership rights.
• Ongoing Disputes or Claims – Even minor financial disputes can result in a government restriction on the land, blocking its sale or future development.

How to Check for Encumbrances and Land Taxes:

1. Request an SKPT (Land Status Information Letter) from the National Land Agency (BPN) to confirm the land is free from financial burdens.
2. Obtain a PBB (Land and Building Tax) Payment Record from the tax office to verify that all taxes have been settled.
3. Check Bank and Notary Records to ensure the land is not under mortgage or tied to any financial claims.
4. Consult with a Legal Expert in land due diligence in Lombok to identify potential red flags before completing the purchase.

Skipping this step in land due diligence in Lombok can result in financial and legal troubles. Ensuring the land is free of encumbrances guarantees a smooth and secure transaction.

6. Conduct a Physical Land Survey

While legal and financial checks are essential, physically inspecting the land is a crucial step in land due diligence in Lombok. A land survey ensures that the physical characteristics of the property align with legal documents and that there are no hidden issues that could affect its value or usability.

Key Aspects to Check During a Land Survey:

• Verify Land Boundaries – The actual size and boundaries of the land should match the information on the land certificate. Misaligned boundaries can lead to disputes with neighbors.
• Confirm Access to Infrastructure – Ensure the land has proper access to roads, electricity, water supply, and other essential services. Lack of infrastructure can increase development costs significantly.
• Check for Environmental Risks – Some areas in Lombok are prone to flooding, erosion, or landslides. Conduct an environmental assessment to identify any potential hazards.
• Detect Encroachments – Neighboring properties might have extended their structures onto the land. Encroachments can lead to legal complications and affect future development plans.

How to Conduct a Proper Land Survey:

1. Hire a Licensed Surveyor – A professional surveyor can accurately map out the land and confirm its measurements align with the legal documents.
2. Compare Survey Results with the Land Certificate – Any discrepancies should be addressed before purchasing the property.
3. Consult Local Authorities – Visit the National Land Agency (BPN) Lombok to verify official land maps and zoning regulations.
4. Speak with Neighbors – Local residents can provide valuable insights into the land’s history, potential disputes, and environmental concerns.

By conducting a thorough land due diligence in Lombok, including a physical land survey, buyers can ensure they are investing in a property that is legally and physically suitable for development. Skipping this step can result in costly disputes or unexpected challenges after the purchase.

7. Hire a Trusted Notary for Legal Verification

A licensed notary (Pejabat Pembuat Akta Tanah or PPAT) plays a crucial role in land due diligence in Lombok by ensuring the legal validity of the property transaction. In Indonesia, a property sale is not legally binding without the involvement of a notary, making their role essential in safeguarding both buyers and sellers. By verifying ownership, legal standing, and potential risks, a notary helps prevent fraud, disputes, and costly legal complications.

Key Responsibilities of a Notary in Land Due Diligence in Lombok

• Verifying Certificate Validity – The notary confirms that the land certificate presented by the seller is legitimate and properly registered with the National Land Agency (BPN). This prevents fraudulent sales involving fake or duplicated certificates.
• Ensuring No Third-Party Claims – The notary checks for any encumbrances, mortgages, or disputes that could affect the land’s ownership. This includes verifying whether there are outstanding loans, family inheritance claims, or overlapping ownership issues.
• Overseeing the Sale and Purchase Agreement (AJB) – A notary ensures that the Sale and Purchase Agreement (Akta Jual Beli or AJB) is drafted correctly, in compliance with Indonesian property laws, and protects the buyer’s interests.
• Registering the Transaction with BPN (Land Office) – Once the transaction is completed, the notary is responsible for registering the land transfer with BPN, ensuring that the new ownership is legally recorded.

Why Hiring an Independent Notary Matters in Land Due Diligence in Lombok

While some sellers may recommend a notary, it is essential to hire an independent, trusted professional to avoid potential conflicts of interest. Relying on a seller’s notary increases the risk of biased handling of the transaction, which could result in overlooked legal issues. By hiring an experienced and reputable notary, buyers can ensure that their land due diligence in Lombok is thorough, legally sound, and free from manipulation.

8. Draft a Secure Sale and Purchase Agreement (AJB)

A legally binding Sale and Purchase Agreement (Akta Jual Beli or AJB) is a crucial step in land due diligence in Lombok. This document finalizes the transaction and ensures that both the buyer and seller are legally protected. Without a well-drafted AJB, buyers risk potential disputes, unclear payment terms, or even losing their investment.

Key Elements of a Secure AJB

• Accurate Buyer and Seller Details – The agreement must clearly state the legal names, identification numbers, and addresses of both parties. This prevents fraudulent transactions.
• Defined Payment Schedule and Refund Clause – Specify the agreed payment terms, including deposits, installment schedules (if any), and refund conditions in case of contract termination.
• Confirmation of Tax and Permit Obligations – The AJB should outline who is responsible for covering taxes, including BPHTB (Land and Building Acquisition Tax) and other related fees.
• Verification of Land Certificates – The agreement must reference the verified land certificate to avoid any future ownership disputes.
• Notary Oversight – A certified notary (PPAT) must witness and legalize the agreement to make it valid under Indonesian law.

Why a Strong Legal Agreement Matters in Land Due Diligence in Lombok

A properly drafted AJB ensures that all terms are transparent, legally binding, and enforceable. If any disputes arise after the purchase, a strong contract provides the legal protection needed to resolve them.

When conducting land due diligence in Lombok, always work with an experienced notary or legal expert to draft and review the Sale and Purchase Agreement (AJB) before signing. This guarantees that your rights are protected and that the transaction complies with Indonesian property laws.

Checklist Before Buying Land in Lombok:

✅ Verify land certificate & ownership
✅ Check for past disputes or encumbrances
✅ Confirm zoning & land use permissions
✅ Conduct a physical land survey
✅ Hire a trusted notary & legal expert
✅ Ensure taxes & fees are cleared
✅ Register the ownership with BPN

By following these must-do steps for land due diligence in Lombok, you can invest safely and avoid scams.