Pre-Project Selling Pattern in Sale and Purchase of Housing and Perspectives of Equitable Legal Cohesiveness
PDF

Keywords

Indonesia; contract laws, property laws, principle of balance, consumer protection

Abstract

A preliminary agreement on sale and purchase of housing is often executed with a pre-project selling system (PPSS), which means marketing or selling a property before it is completed. A PPSS invites litigations and harms consumers when the Buy and Sell Agreement for Land and Building (PPJB) document prepared by the builder does not provide adequate legal protection to consumers due to the lack of principle of balance between the developer and the consumer. This study examines whether equitable relief could be a good solution to resolve the issues; whether it would provide legal cohesiveness in the case of the failure of the PPSS. The study finds that in the Indonesian law, equitable relief is in the form of a rescission of a contract, cancelling all terms and conditions and restoring both parties to their pre-contract position. Such equitable relief provides cohesiveness particularly in property related contracts where either party is unable to bear the monetary compensation. The court can also cancel the contract or give the verdict to sell the property pursuant to the terms of the original contract. The study also found that courts might also order rectification or revision of the contract to ensure legal cohesiveness for both parties. The results also made evident that by attempting legal cohesiveness, there might also be necessary to redefine the intention of both parties and ensure that the rectified regulations of the contract must be fulfilled and no breach or violation of the contract should take place. The study recommends to design a legal protection model for parties entering into a pre-project selling contract to avoid the need of any equitable relief at a later stage.

 

PDF