Picture this … You are lazing about at the beach, on a sun lounge, tropical cocktail or icy cold beer in hand, watching the sunbathed bodies, not a care in the world … Back at your holiday villa, housekeeping have made your bed, cleaned your bathroom and are now preparing a gorgeous seafood meal for your return after sunset. You will take a midnight swim in your private pool and fall into crisp clean sheets, knowing that breakfast will be ready when you awaken in the morning. You are going to do it all again …
Then … It occurs to you …
What if every day was like this?
Then … You do the unthinkable …
We bought some land and we are going to build a villa and make money and live happily ever after, on the beach, drinking cocktails, while someone else does all the work. How jealous are you right now?
Now … Would you have done this at home?
TraceWorthy Consulting hears these stories every day and not many experience a happy ending. More often than not, the fantasy of a lifelong island holiday ends in tears.
Why?
People on holiday are known to make emotional decisions; and, put simply, they leave their brains at home. Due diligence is not performed. Contracts in foreign languages are signed. Life savings are handed over in cash.
Recently, a lovely Australian lady contacted TraceWorthy Consulting to find out how to market a holiday villa in Bali, Indonesia. An initial consultation with our team is designed to be very casual, so we met at a local restaurant and shared a delicious meal and a drink or two. Ms J told her story.
Ms J had been a frequent traveller to Bali and had fallen in love with the people, the climate and the lifestyle. She decided it was time she left her job and did something new, and Bali was calling to her. Ms J met a very likeable land owner and he offered her an extremely good price on a 20-year lease. A local notaris (public notary) drew up a lease agreement and all parties signed. Ms J handed over the cash.
Ms J set about contracting an architect and a builder to start constructing four villas on her new land. There seemed to be delay after delay, so Ms J thought she should speak to someone about what might be the issues.
Enter Tracy Wilkinson, Founder of TraceWorthy Consulting.
The first step was to look at the documents, including the lease agreement, the certificate of land title, the land survey, the landowner’s identification, etc.; and, the land itself. On the surface, all seemed above board.
Perhaps the issue is with the bureaucratic process for obtaining the building license, which is not unusual here in Indonesia. It is a multi-jurisdiction sign off process that requires some forensic investigation and diplomatic finesse to navigate. TraceWorthy Consulting’s lead investigator began knocking on doors and asking the tricky questions.
Bingo!
The lease agreement states:
The Second Party or their designated party shall be allowed and authorised by the First Party to establish any kind of building on such land according the form and construction as well as facilities desired by the Second Party as well as to make improvements and / or additions in the future if deemed fit by the Second Party, however, with due regard of the prevailing regulations.
Ms J did not find out what the “prevailing regulations” are and assumed this meant she had permission to build right away. Incorrect.
On investigating the land use categorisation, the TraceWorthy Consulting team discovered the land is indeed registered as a “Green Zone,” which means it cannot be built on. It can be used for agricultural purposes only.
What options are available for Ms J?
Any and all costs incurred as well as risks of such works shall be for the sole account of the Second Party or their designated party.
Ms J bought herself a 20-year lease on some farmland and could now grow her own rice and vegetables. She could not build on it and she could not live on it. This was not the dream Bali lifestyle she had in mind a few months ago.
TraceWorthy Consulting will lead the submission for a change of land use categorisation. This may take years and will cost Ms J a lot of money and lost opportunity. There is no guarantee of a satisfactory outcome.
The moral of the story:
Partner with TraceWorthy Consulting BEFORE you sign up for your Bali happily ever after. Or, stay on the beach with those delicious cocktails and icy cold beers.
