The legal framework for Hak Pakai (Right to Use) is primarily established by Articles 41 through 43 of Law No. 5 of 1960 on Basic Agrarian Regulations (UUPA), and further refined by Government Regulation (PP) No. 18 of 2021 concerning Management Rights, Land Rights, Flat Units, and Land Registration. Article 41, Paragraph (1) of the UUPA defines Hak Pakai as:

“Hak pakai adalah hak untuk menggunakan dan/atau memungut hasil dari tanah yang dikuasai langsung oleh Negara atau tanah milik orang lain, yang memberi wewenang dan kewajiban yang ditentukan dalam keputusan pemberiannya oleh pejabat yang berwenang memberikannya atau dalam perjanjian dengan pemilik tanahnya, yang bukan perjanjian sewa-menyewa atau perjanjian pengolahan tanah, segala sesuatu asal tidak bertentangan dengan jiwa dan ketentuan-ketentuan Undang-undang ini.” (The right to use is the right to use and/or collect products from land directly controlled by the State or land owned by another person, which grants authorities and obligations specified in the decision of its granting by the authorized official or in an agreement with the landowner, which is not a lease agreement or a land cultivation agreement, provided it does not conflict with the spirit and provisions of this Law.)

Subjects Eligible for Hak Pakai

Under Article 52 of Government Regulation No. 18 of 2021, the entities entitled to hold Hak Pakai are categorized based on the duration of the right. The eligible subjects include:

  1. Indonesian citizens (Warga Negara Indonesia);
  2. Legal entities established under Indonesian law and domiciled in Indonesia;
  3. Foreign citizens who reside in Indonesia;
  4. Foreign legal entities that have a representative office in Indonesia;
  5. Religious and social bodies;
  6. Government agencies (Instansi Pemerintah);
  7. Local Governments;
  8. Village Governments; and
  9. Representatives of foreign countries and representatives of international agencies.

Hak Pakai can be granted over three types of land: State Land (Tanah Negara), Management Right Land (Tanah Hak Pengelolaan), and Private Ownership Land (Tanah Hak Milik). According to Article 49 of PP 18/2021, the creation of Hak Pakai follows specific administrative paths:

  • For State Land: Granted via a decree from the Minister of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN).
  • For Management Right Land: Granted via a ministerial decree based on the approval of the Management Right (Hak Pengelolaan) holder.
  • For Private Ownership Land: Created through a land use agreement between the Hak Milik owner and the recipient, which must be formalized by a Land Deed Official (Pejabat Pembuat Akta Tanah or PPAT) and subsequently registered at the Land Office.

Duration and Extensions

Current regulations distinguish between Hak Pakai with a fixed term (Hak Pakai dengan Jangka Waktu) and Hak Pakai for an indefinite period (Hak Pakai Selama Dipergunakan). Pursuant to Article 53 of PP 18/2021, fixed-term Hak Pakai is granted for a maximum initial period of 30 years. It may be extended for a further 20 years and renewed for an additional 30 years, totaling a potential 80-year tenure.

The indefinite term (Selama Dipergunakan) is reserved exclusively for specific institutional subjects, namely:

  1. Government agencies;
  2. Local Governments;
  3. Village Governments;
  4. Religious and social bodies;
  5. Representatives of foreign countries and international agencies.

For fixed-term Hak Pakai, the application for extension must be submitted no later than two years before the initial term expires. The renewal of the right is conducted after the extension period ends. The granting, extension, and renewal processes are contingent upon the land being utilized effectively in accordance with the conditions set forth in the original granting decree or agreement.

Rights, Obligations, and Restrictions

The holder of Hak Pakai is entitled to use the land and/or its products for the specific purposes designated in the granting decree or agreement. Under Article 55 of PP 18/2021, the holder is obligated to:

  1. Pay the state revenue (BPHTB and non-tax state revenue/PNBP) or the compensation agreed upon with the landowner;
  2. Use the land according to its designated spatial planning (Rencana Tata Ruang);
  3. Maintain the land and prevent environmental damage;
  4. Relinquish the land to the State or the landowner upon the expiration of the right.

Hak Pakai may be used as collateral for a debt by encumbering it with a Mortgage (Hak Tanggungan), provided the land is State Land or Management Right Land. This is regulated under Law No. 4 of 1996 on Mortgage Rights. However, Hak Pakai over Hak Milik land cannot be encumbered with a Mortgage.

Transfer of Rights

The transfer of Hak Pakai is permitted under Article 54 of PP 18/2021 through various mechanisms, including sale and purchase, exchange, inheritance, or capital participation. For Hak Pakai over State Land or Management Right Land, the transfer requires written permission from the Minister or the authorized official. For Hak Pakai over Hak Milik land, the transfer requires the consent of the Hak Milik owner and must be registered with the Land Office.

Termination of Hak Pakai

The expiration or termination of Hak Pakai is governed by Article 57 of PP 18/2021. The right may be declared void or terminated due to:

  1. Expiration of the term (if not extended or renewed);
  2. Cancellation by the Minister due to administrative errors or breach of obligations by the holder;
  3. Voluntary relinquishment by the holder before the term expires;
  4. Revocation for public interest (under separate land acquisition laws);
  5. Abandonment (Tanah Terlantar);
  6. Destruction of the land (e.g., due to natural disasters);
  7. The holder no longer meeting the legal requirements to hold the right (e.g., a foreign citizen leaving Indonesia permanently).

Upon termination, the land reverts to the State (in the case of State Land), the Management Right holder, or the Hak Milik owner. Any buildings or structures remaining on the land must be handled according to the terms stipulated in the original granting agreement or decree.

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