Legal Protection for Good Faith Purchasers in Land Ownership Disputes

Land has considerable economic value in society, so questions of ownership frequently end in disputes. One legal phenomenon often encountered is that of double certificates or overlapping titles. Take, for example, a plot of land that has been physically occupied by a group of local residents for more than 10 years. They then register their ownership and a Certificate of Freehold Title (SHM) is issued. At some point, they sell the land to another party. However, once the sale has been lawfully completed before a Land Deed Official (PPAT), a third party suddenly appears claiming to hold an older certificate over the same plot, even though the National Land Agency (BPN) had issued a new certificate to the residents in physical possession of the land. A situation like this creates real legal uncertainty, especially for the latest purchaser. As the buyer, they followed every administrative procedure required by law, yet now risk losing their right to possess and enjoy ownership of the land. This reveals a stark clash between Indonesia’s land registration system, which adopts a negative system with positive tendencies, and the fate of members of the public who often fall victim to administrative negligence. Against this backdrop, this article examines two main questions. First, what are the criteria for a purchaser to qualify as acting in good faith in a land ownership dispute? Second, to what extent does the law protect good-faith purchasers in land ownership disputes?

To examine these two questions, this article uses an analytical framework based on two legal theories. For the first question, the analysis takes the perspective of Legal Positivism. Under this approach, “good faith” is not assessed on assumptions or morality alone, but objectively on the basis of the certainty of the applicable positive law. In other words, whether a purchaser meets the good-faith criteria must be tested against, and rest entirely on, the parameters set out in binding legislation and case law. For the second question, this article uses the Theory of Legal Protection as its main analytical tool. This theory is used to examine how legal instruments and court decisions work to deliver justice for good-faith purchasers, and it explores in depth the forms of protection, both preventive and repressive, that ensure the civil rights of good-faith purchasers are safeguarded.

Criteria for Good Faith in Land Ownership Disputes

Let us examine the criteria for good faith through the lens of legal positivism. From a positivist perspective, the law must be written, provide certainty and not rest merely on feelings or abstract morality. This means a purchaser’s “good faith” status is not measured simply by their claim to have been unaware of the overlapping titles. Good faith must be tested against firm, objective parameters under positive law, whether legislation or binding case law.

The principal basis for good faith in any sale and purchase is Article 1338(3) of the Indonesian Civil Code (KUHPerdata), which requires agreements to be performed in good faith. In the context of land law, when a purchaser enters into a transaction concerning land, they are entitled to rely on the authentic documents issued by the state through the BPN. This is consistent with Government Regulation Number 24 of 1997 on Land Registration, as amended by Government Regulation Number 18 of 2021 on Management Rights, Land Rights, Strata Title Units and Land Registration, which aims to provide legal certainty. Once the BPN has issued a certificate for a plot of land, that document becomes valid evidence.

A claim of good faith is difficult to qualify as long as its parameters remain unclear. To avoid abstract claims of good faith, particularly in cases of overlapping titles, the Supreme Court sought to set clear parameters in Supreme Court Circular (SEMA) Number 4 of 2016. The first criterion is that the transaction must follow the procedures and use the valid documents prescribed by legislation. The second criterion is that the purchaser must exercise a measurable degree of prudence. The purchaser must be able to prove that, before the transaction, they or the PPAT checked the validity of the Certificate of Freehold Title at the local Land Office. This check must show that the certificate is “clean”, meaning it carries no record of a block or dispute (clean and clear). The purchaser must also make sure that the land is genuinely in the seller’s physical possession.

Legal Protection for Good-Faith Purchasers

We will analyse the position of good-faith purchasers caught up in overlapping-title disputes using the Theory of Legal Protection. Drawing on the views of constitutional and administrative law scholars, legal protection rests on two main pillars: preventive protection and repressive protection (dispute resolution). In the context of land disputes, this theory ought to protect the civil rights of good-faith purchasers.

Protection for purchasers is in fact provided through the land registration system itself. The Basic Agrarian Law (UUPA) in conjunction with Government Regulation Number 24 of 1997 and Government Regulation Number 18 of 2021 expressly provides that a certificate is strong evidence of title. Indonesia’s negative registration system with positive elements does not guarantee absolute accuracy, but the state does require checks on formal completeness, verification of physical data and validation of the land book at the BPN before the Deed of Sale and Purchase (AJB) is signed. This is a form of preventive protection by the state. Its purpose is clear: to minimise the scope for disputes and give good-faith purchasers a sense of security.

When an overlapping-title problem arises and ends up in court, repressive legal protection is put to the test. If the purchaser has satisfied the good-faith criteria, the court should uphold the purchaser’s rights. This has become the Supreme Court’s established position through a number of decisions. For example, in Supreme Court Decision No. 1230 K/Sip/1980 and Decision No. 251 K/Sip/1958, the panel of judges expressly held that a good-faith purchaser must be protected by law and that the sale is valid. This consistent position has been maintained, including through Supreme Court Jurisprudence No. 4/Yur/Pdt/2018, which is in line with the spirit of SEMA No. 4 of 2016. The Supreme Court has affirmed that the legal certainty of a sale carried out in accordance with procedure must not simply be overturned because an older certificate emerges, particularly where this stems from administrative negligence.

The criteria for good faith on the part of a purchaser in a land ownership dispute are not measured by the purchaser’s word alone, but are proven objectively within the legislative framework, specifically the guidelines in SEMA Number 4 of 2016. A purchaser lawfully qualifies as acting in good faith if they have followed lawful transaction procedures, exercised prudence by confirming that the certificate is clean and clear, paid a fair price and confirmed direct physical possession. Meeting these parameters is an absolute requirement for the purchaser to obtain a valid legal standing and avoid allegations of bad faith.

Legal protection for good-faith purchasers of disputed land is provided through two main legal instruments: preventive protection and repressive protection. Preventive protection takes the form of procedural requirements for transfers of title involving the PPAT and the BPN as a mitigation measure. When a case arises and ends up in court, repressive protection must be enforced in line with Supreme Court case law. Through these instruments, the law guarantees certainty by upholding the good-faith purchaser’s ownership and not annulling the sale because of an administrative defect that was not their fault.

Illustration: Gemini AI