Villa co-ownership in Lombok: how buying a share actually works
Two friends, a family or a group of investors can hold a villa in Lombok together. The three legal ways to do it and what needs to be put in writing.
Buying a villa with other people is increasingly common in Lombok: it splits the price, splits the use and splits the rental income when nobody is staying. What changes compared with buying alone is not the house, it is the paper that says who owns it and how decisions are made. Here are the three structures people use and what should be written down before anyone pays.
Can a foreigner co-own a villa in Lombok?
Yes, under the same rules as buying alone. A foreigner cannot hold full ownership of the land (the title Indonesia calls Hak Milik), but can hold a long-term right of use, a long lease, or shares in an Indonesian foreign investment company that holds the right to build. Any of those rights can be shared between several people. The basics are explained in leasehold or PT PMA; what follows is how it applies when there is more than one of you.
The three ways to share a villa
One contract with several holders. The long lease or right of use is signed in the name of all the buyers at once, each with a percentage. It is the simplest and cheapest structure to set up. Its limit: any change (selling a share, extending the term) needs everyone's signature.
A company that holds the villa. The buyers create a PT PMA, the Indonesian foreign-capital company, and the company holds the right over the land and the house. Each partner holds shares in proportion to what they put in. Selling your part means selling shares, without touching the villa's title. It costs more to set up and has yearly obligations, but it is the tidiest structure when the group is large or wants people to be able to join and leave.
A developer's programme. Some projects sell the villa already divided into shares, with a company created by the developer, a usage calendar and a management company that rents the house out the rest of the year. You buy a share and sign the rules that already exist. It is the most convenient option and the least flexible: the project sets the rules.
What must be in writing, whatever the structure
A co-owners' agreement, signed before the purchase, that answers six questions:
- What percentage each person holds and what they paid for it.
- How the weeks of use and the weeks of rental are shared out.
- How rental income and fixed costs (maintenance, pool, insurance, management) are split.
- Who decides on renovations and with what majority.
- What happens if one owner wants to sell: whether the others have first refusal and at what price.
- What happens if one owner stops paying their share of the costs.
Without that document, co-ownership works as long as everyone agrees. With it, it also works when they do not.
How TANAH handles it
Every listed project states on its page the type of right over the land and the years remaining, which is the first thing that determines which co-ownership structure can be used. When a group wants to buy a villa together, the developer is asked in writing whether it accepts several holders or prefers a company, and that is settled before the reservation. The island's projects are under Lombok and the step-by-step of a purchase is in how to invest.
General information, not legal or investment advice. As in any purchase, a licensed notaris or lawyer confirms the figures and the paperwork before you sign.
