Buying Off-Plan in Bali: 7 Checks Before You Deposit

Before you pay a deposit on an off-plan Bali villa, verify seven things: the land title and the developer's right to build on it, the zoning, the PBG, the payment structure, the track record, any guarantee, and your exit. Each is checkable in days.

We build and sell off-plan property in Bali. Publishing this is against our short-term interest, because a buyer who works through it will ask us harder questions. That is the point. The checks below are written so a dishonest developer cannot pass them with a photocopy and a smile.

1. Land title and the right to build

Ask for the land certificate, then ignore the copy you are given. A photocopy proves nothing. What you need is a cek sertifikat performed at the local Land Office (Kantor Pertanahan) by your notary, not the developer's, confirming four things:

• the certificate is genuine and current;
• the registered holder is who the developer says it is;
• the parcel boundaries match the site you visited;
• there is no encumbrance — specifically no hak tanggungan (mortgage) registered against it.

The encumbrance point is the one people skip. If the land is mortgaged to a bank and the developer defaults, the bank's registered security outranks your unregistered contract. You can run a first-pass check yourself via the ATR/BPN Sentuh Tanahku app or the BHUMI portal (how-to) — a screening tool, not a substitute for the formal check.

If the developer is not the registered owner — common, and not automatically a problem — ask for the head lease or cooperation agreement with the landowner. Read its term, and what happens to sub-leases if it is terminated. Your 30 years cannot exceed the developer's.

Then verify the entity: the brand on the brochure is often not the company on the contract. Check the deed, directors and shareholders on AHU Online and the NIB and licences on OSS. Foreign buyers hold Bali property through hak sewa (lease) or hak pakai; freehold hak milik is reserved to Indonesian citizens (Hukumonline). A nominee arrangement imitating freehold is legal exposure, not a clever workaround.

2. Zoning: is nightly rental actually permitted here?

"Orange zone" and "pink zone" are brochure shorthand for designations in the regional spatial plan (RTRW/RDTR). Shorthand is not evidence. The checkpoint here is short: ask the developer, in writing, for the parcel's zone code and its KKPR reference — the confirmation that the intended use conforms to the spatial plan on that specific land, still governed by PP No. 21 of 2021 — then verify both yourself on the Ministry of ATR/BPN viewers, RTR Online and RDTR Interaktif, and on Bali's provincial BATARA spatial planning portal. If neither the code nor the KKPR is produced on paper, you have no zoning position at all. The detail — what the zoning permits and how to verify a parcel — is in a separate guide.

Zoning is not the whole answer. Operating a villa commercially also requires business licensing, now governed by PP No. 28 of 2025 (in force 5 October 2025, replacing PP No. 5 of 2021). The codes themselves moved recently: KBLI 2020 was revoked by Perka BPS No. 7 of 2025 with effect from 18 December 2025, so villa activity is now 55203 Aktivitas Vila (previously 55193) and pondok wisata is 55201 Aktivitas Rumah Tinggal Sewa (Homestay) (previously 55130). Permenpar No. 6 of 2025 — which sets tourism business standards, supervision and administrative sanctions up to suspension and licence revocation — predates that change, and its annex still lists the old codes. That mapping gap is live, so expect a licence document and an OSS record to disagree, and ask which code the licence you are being shown was actually issued against. One correction worth making while we are here: pondok wisata is not restricted to Indonesian citizens. The literal WNI wording sat in Permenpar 18/2016 Pasal 4(3), which has been revoked; what remains is a reservation of that business scale to Koperasi and UMKM, which is a different restriction.

The enforcement risk is recent: on 21 July 2025, 48 structures at Bingin Beach — some operating since the 1980s — were demolished for standing on protected coastal land without valid permits (The Honeycombers, Indonesia Expat). Long occupation is not a defence.

3. PBG — the approval that replaced IMB

Since PP No. 16 of 2021, the implementing regulation for Law No. 28 of 2002 on Buildings, new construction is approved through a PBG (Persetujuan Bangunan Gedung) rather than an IMB (Izin Mendirikan Bangunan).

Attribute	IMB (pre-2021)	PBG (PP 16/2021)
Nature	Permission to build, granted case by case	Approval that a design meets published technical standards
Issued	Before construction	Before construction
Completion document	—	SLF (Sertifikat Laik Fungsi) required before use
Status of old permits	Valid until expiry	New approvals issued as PBG only

Three things to do with a PBG:

1. Get the number. Not "we have PBG" — the registration number and issuing decision from the local DPMPTSP. Have your notary confirm it with that office.
2. Match it to what you are buying. A PBG approves a specific building: unit count, footprint, storeys, height. A PBG for three units does not cover five. Compare the approved drawings against the sales floor plans.
3. Ask about SLF. PBG lets the building be built; the SLF confirms it may be occupied and used. Ask in writing who obtains it, and by when.

"PBG in process" means there is no approval. It may be entirely honest — applications take time — but it should change your payment terms, not just your expectations.

4. Payment structure: milestones, not dates

This is where risk is transferred, quietly, in a table.

Attribute	Date-linked payment	Milestone-linked payment
Trigger	Calendar date	Verified physical progress
If construction stalls	You keep paying	Payments stop
Who carries delay risk	Buyer	Developer
Verifiable by you	No	Yes, if defined precisely

A date-linked schedule on an unbuilt building means you fund a project whether or not it is being built. A milestone schedule only helps if the milestones are defined precisely ("reinforced concrete roof slab poured and cured across all units") and certified by someone who does not work for the developer — an independent quantity surveyor or engineer you appoint. Otherwise the developer marks its own homework.

No Indonesian statute fixes a minimum percentage of your own unit that must be built before you pay, and you should be sceptical of anyone who tells you otherwise. What Indonesian housing law does tell you is what happens when you try to get out. Under PP No. 12 of 2021, Pasal 22H(3), a developer may retain at least 20% of what you have paid where you cancel during the marketing stage — a floor, not a cap — falling to 10% where the cancellation follows a declined mortgage application (analysis, detail). Whether that regime binds a 30-year leasehold villa sold to a foreigner is a genuine question for your own counsel — many Bali projects are structured as leases rather than housing sales. Either way, read your own cancellation clause before you sign rather than after: the statutory floor is high, and contracts drafted in its shadow are rarely more generous than it.

Applied to us: Berawa Private Suite's published schedule is 10% at booking, 25% at deed, 25% at foundation, 30% at roof, 10% at handover. That means 35% is paid before any foundation milestone is certified. Every developer in Bali using a booking-plus-deed structure has the same exposure. You should ask us, and them, two questions: what secures that 35% while the building does not yet exist, and what you would actually recover if you cancelled.

Escrow, and the realistic alternatives

Escrow accounts (rekening escrow) are an ordinary banking product in Indonesia, but they are not standard in Bali villa sales. Anteya, which advises foreign buyers on Bali developer insolvency, describes the workable version as "a tri-party bank-escrow account where buyer wires milestone payments to a developer escrow account at a local bank, with release controlled by a written release-mechanism clause drafted and witnessed by the notaris", and notes that most developers resist it because it locks up working capital (source). The last clause is the mechanism, not a formality: a release condition drafted and witnessed by the notaris is what stops the developer deciding on its own when the bank should pay out.

The same source makes a point worth repeating: Indonesian notaris "are not authorized to operate client trust accounts the way English-tradition solicitors are". So a notary holding your money is not the protection an English or Australian buyer assumes it is. Confirm this with your own notary before relying on either arrangement.

If full escrow is refused, the realistic fallbacks are: paying less up front and more at later milestones; a meaningful retention held back past handover for defects; independent certification before each release; and a clearly drafted refund and termination clause. As Anteya puts it: "If the SPA does not name a third-party fund-holder, the deposit is unsecured against the developer's balance sheet."

5. Track record: verify it on the ground

Renders prove nothing. Delivered buildings do.

• Ask for addresses, then go. A completed project has a location. Stand in it.
• Talk to owners without the developer present. Ask for two or three owner contacts from a finished project — a developer with a clean record will provide them — then ask about delay, quality, snagging and how disputes were handled.
• Check dates, not adjectives. Ask for a prior contract showing the promised handover date and the corresponding handover record (berita acara serah terima). The gap is the only delivery statistic that matters.
• Confirm the entity is the same. Prior projects often sit in different companies. A brand's history is not the balance sheet you are contracting with; check the specific PT on AHU and OSS.
• Run a litigation and insolvency search. Have your lawyer search the courts for proceedings, including PKPU and bankruptcy, against the contracting entity and its directors.

A note on statistics: the figure "180+ property fraud complaints recorded by AREBI in 2024" circulates widely in Bali property content. We tried to trace it to AREBI or to news reporting and could not — every instance we found was one property blog citing another. We will not use a number we cannot source, and neither should you. Documented enforcement events like Bingin are more useful anyway: you can read the primary reporting yourself.

6. Guarantees and bonds — read this one twice

This is the section where marketing language does the most damage, and it is the reason we wrote the article.

Anteya states plainly that "the bank guarantees you see on a Bali project balance sheet are jaminan pelaksanaan (performance bonds) running between the developer and the main contractor", and that "buyer-side BG on a Bali residential villa unit is effectively non-existent" (source). Our own experience of the market is consistent with that. A contractor performance bond is a real instrument — it just does not pay you.

Attribute	Contractor performance bond	Buyer-protection instrument
Beneficiary	The developer (or project owner)	You, named
Protects against	Contractor failing to perform	Developer failing to deliver or refund
Triggered by	Developer's demand	Your demand, on defined conditions
Pays out to	The developer	You
Useful if developer collapses	No	Yes, to the guaranteed amount

So do not ask "do you have a bank guarantee?" — nearly everyone can answer yes. Ask these six questions and require documents:

1. Which bank issues it? Name and branch, so it can be confirmed independently.
2. What instrument is it? Jaminan pelaksanaan, a standby letter of credit, a refund guarantee, or a corporate undertaking with no bank behind it at all.
3. Who is the named beneficiary? If the document does not name you or a class including you, it is not your protection.
4. What triggers payment? On first written demand, or only after a court judgment? Conditional guarantees can take years.
5. How much, and until when? A guarantee capped far below your payments, or expiring before handover, is decorative.
6. May I see the document, and will the bank confirm it to me? A real instrument survives that request. A slide in a sales deck does not.

Demand those specifics from any developer — including us. Kaluna Development operates a Bank Guarantee Program. This article will not characterise what that programme covers, because the specifics that matter — issuing bank, instrument type, named beneficiary, payout trigger, amount and expiry — have not been published, and we are not going to describe the protective effect of a document we have not put in front of you. So ask us the six questions above exactly as you would ask them of anyone else, and require the instrument itself. If we cannot produce it, apply the conclusion this article applies to every other developer: treat the guarantee as marketing. Walk away from any developer, us included, that will not put the document in your hands.

One related note, and it applies to us directly: the 30-year structure guarantee offered on our project is a Kaluna warranty — a contractual promise from the developer — not a bank instrument. The two are different things and should never be presented as one. A warranty is worth exactly as much as the company's solvency in year 20. That does not make it worthless; it makes it something other than insolvency protection, and it should never be sold as such.

7. The exit

Most off-plan buyers plan the purchase in detail and the exit not at all.

Before handover, you hold a contractual right against the developer, not a registered interest in land. Selling that position means assigning the contract, which almost always needs the developer's written consent. Read the clause: is consent discretionary or "not to be unreasonably withheld"? Is there a transfer fee? Are you barred from reselling below list price? Some contracts prohibit assignment until handover altogether — meaning you cannot exit at all.

After handover, you are selling a lease. Ask whether it is freely transferable, whether the landowner's consent is needed, what fee applies, and whether the lease has been notarised and annotated against the land certificate. An unregistered lease is harder to defend against a later purchaser or mortgagee of the land.

If you need out entirely, read the termination and refund clause first, against the statutory floor set out in section 4. Retaining at least 20% of what you have paid is the baseline the law contemplates, not the worst case a contract can impose.

The extension. For a 30-year lease the extension clause carries most of the long-term value, and there is a wide gap between a right to extend at a stated price or formula and a promise to "negotiate in good faith at prevailing market rates". Have a PPAT tell you which one your document contains. We have set out separately what a 30-year Bali lease is worth in year 10, 20 and 28.

Red flags when buying off-plan in Bali

Signal	Why it matters
Only a photocopy or photo of the land certificate	Nothing has been verified at the Land Office
"PBG in process" while full deposits are collected	You are funding an unpermitted building
Date-linked payment schedule on an unbuilt project	You keep paying whether or not work happens
Payments requested to a personal account, or offshore	Removes any link to the contracting entity
Pressure to sign today for a "last unit" discount	Urgency is the standard substitute for documents
"Bank guarantee" mentioned but never shown	Almost always a contractor bond, if it exists
Refusal to give owner contacts from past projects	The cheapest possible reference check, refused
Contracting entity differs from the brand with the track record	The history you were sold is not the balance sheet you are buying
Zoning described only by colour, with no KKPR	Colour is marketing; KKPR is the document
Assignment before handover prohibited or discretionary	You have no exit if circumstances change
Nominee arrangement offered to imitate freehold	Legal exposure dressed as a structure

What this means for the project we sell

Berawa Private Suite is five units in Berawa, sold on a 30-year leasehold, PBG registered, in an Orange Zone parcel, with handover estimated for July 2027 and payments released against verified construction milestones. Kaluna Development has 15+ years of operation and 121+ delivered units, with Anjuna Palms and CANNA as prior projects, and runs design, construction and rental management in-house through Blueprint, Kaluna and Aasha Management.

Every one of those statements is a claim until you check it. Ask us for the PBG number. Ask us for the KKPR. Ask us for owner contacts at Anjuna Palms and CANNA. Ask us the six bank guarantee questions and ask to see the document. Ask us what secures the 35% paid before foundation. And take the same approach to the yield projection you are being sold, by us or by anyone else. If any answer is a brochure rather than a document, apply the same conclusion you would apply to anyone else. Project details are at berawa.kalunadevelopment.com.

Questions buyers ask

1. What is the difference between PBG and IMB? PBG replaced IMB under PP No. 16 of 2021. IMB was a permission to build; PBG is approval that a design meets published technical standards. Existing IMBs stay valid until expiry; no new IMB is issued.

2. Does "PBG in process" mean approved? No. Ask for the registration number and issuing decision from the local DPMPTSP, and have your own notary confirm it with that office.

3. Do bank guarantees on Bali projects protect the buyer? Usually not — they are typically contractor performance bonds naming the developer as beneficiary. Check the named beneficiary on the document itself.

4. Can I use escrow? Escrow accounts exist at Indonesian banks but are not standard here. The workable version is a tri-party bank-escrow account with a release-mechanism clause drafted and witnessed by the notaris; notaries here do not run client trust accounts.

5. Is nightly rental legal on any Bali plot? No. The spatial plan must permit tourism accommodation and the operator needs licensing under KBLI 55203 — recoded from 55193 in December 2025 — per Permenpar No. 6 of 2025. Verify on GISTARU, not in a brochure.

6. How much should be built before I pay a large instalment? No statutory percentage governs a leasehold villa sale to a foreigner. Set the test commercially: precisely defined milestones, certified by someone you appoint, and no more paid before the structure exists than you could absorb losing.

7. How do I verify a track record? Visit the finished buildings, speak to owners without the developer present, compare contracted against actual handover dates, and confirm the contracting entity delivered them.

8. What if the developer fails? With no third-party fund-holder named, your deposit is unsecured and ranks behind secured creditors. Ask your lawyer about your position in a PKPU or bankruptcy before paying.

9. Can I sell before completion? Only if the assignment clause allows it. Check whether consent is discretionary and what fee applies, before signing.

10. What should an off-plan contract say about the lease start date? It should state the exact commencement and expiry dates of the 30-year term, and whether the clock starts at signature of the notarial deed or at handover. On a two-year build that difference is two years of a 30-year term — roughly 7% of everything you are buying. Get both dates written into the contract, not implied by it.

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This article is general information, not legal or tax advice. Indonesian land, licensing and building law is fact-specific and changes; regulations cited here should be read in full and in their current form. Engage a licensed Indonesian notary (PPAT) and independent legal counsel of your own choosing — never the developer's — before signing anything or transferring funds.