Indonesia Commercial Security Deposits: Bank Guarantees
Understanding commercial security deposits in Indonesia for 2026.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
In leasing commercial buildings, such as shopping centers or multi-story offices, security deposits are primarily governed by the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata / KUHPerdata) — which has been in effect since 1 January 1848 (promulgated via Staatsblad No. 23 of 1847) — and the principle of freedom of contract (Article 1338). Article 1338 establishes the principle of 'Freedom of Contract' (pacta sunt servanda), stipulating that all legally executed agreements bind the parties as law. There are no specific statutory provisions in the Civil Code or specific property laws (such as Law No. 20 of 2011) dictating commercial deposit structures; instead, they are negotiated as a matter of contract between the property owner and the corporate tenant.
Three Commercial Deposit Layers
While not legally mandated, property owners commonly negotiate three types of commercial deposits in the lease agreement:
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Security Deposit: Often equivalent to 1 to 3 months of the base rent, held by the landlord as security for the lease terms.
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Service Charge Deposit & Utilities: Typically valued at 3 months of combined monthly fees (such as electricity and water). This functions to cover potential unpaid utility dues if a tenant vacates prematurely.
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Fit-Out Deposit: A separate deposit commonly requested to cover potential damages during a tenant's customized floor modifications or renovations. This amount is typically refunded upon completion of the installation, provided no damage occurs to the building.
Return Terms
Return timelines and conditions must be explicitly stated in the lease agreement. While a return period of 30 days after final handover is a common market practice, it is not a statutory requirement. Landlords typically condition the return on the clearance of any outstanding utility bills, VAT obligations, or damage repairs. Furthermore, whether deposits are non-interest bearing is purely a matter of contractual agreement between the parties, not a statutory mandate under Indonesian law.
Substantive Legal Guidance in Indonesia
Explain the 'Fit-out Deposit' (Jaminan Fitting-out) which is unique to commercial spaces and covers potential damage during renovations. This is critical because the Indonesian legal system prioritizes the 'consensus' (musyawarah) between parties and the freedom of contract (Article 1338 of the Civil Code). Additionally, the role of stamp duty (Materai) is governed by Law No. 10 of 2020; a flat rate of IDR 10,000 is required for documents of a civil nature, including lease agreements. The absence of a stamp does not invalidate the contract, as legal validity is established under Article 1320 of the Civil Code (requiring mutual consent, legal capacity, specific subject matter, and lawful cause). However, the stamp is a fiscal requirement for a document to be admissible as evidence in a District Court (Pengadilan Negeri); if missing, it must be rectified through 'subsequent stamping' (pemeteraian kemudian).
Compliance Strategy for Indonesia Property Managers
When managing properties in the Indonesian market, one must prioritize the 'Itikad Baik' (Good Faith) doctrine. This legal principle means that contracts are interpreted by the mutual intent and fairness between the parties. Landager's compliance tools are designed to simplify this tracking, providing time-stamped logs of communications and payment history that can be directly presented in the District Court (Pengadilan Negeri). Also, understanding the requirements for building permits is essential, specifically the transition where the IMB (Izin Mendirikan Bangunan) was replaced by the PBG (Persetujuan Bangunan Gedung) under Law No. 11 of 2020 and Government Regulation No. 16 of 2021. Property managers must ensure the building has a valid PBG and a Certificate of Functionality (Sertifikat Laik Fungsi / SLF) to ensure the premises are legally compliant for commercial use.
How Landager Helps
Landager tracks lease terms, automated somasi reminders, and Indonesian tax compliance - making it easy to stay compliant with Indonesia regulations.
Sources & Official References
Frequently Asked Questions
▶What are the key landlord-tenant laws in Indonesia?
Residential tenancy law in Indonesia is primarily governed by the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata / KUHPerdata). Unlike some countries with stringent tenant protection laws, Indonesia leans heavily towards freedom of contract. This means the stipulations within the lease agreement (Perjanjian Sewa Menyewa) strictly govern the rights and obligations of both parties. This guide covers the essential compliance requirements for property owners and landlords.
Read the complete guide▶What is the legal eviction process for landlords in Indonesia?
The eviction process in Indonesia requires landlords to follow formal legal procedures. Valid grounds typically include non-payment of rent, lease violations, or the landlord's personal use of the property. Landlords must provide proper written notice, allow any required cure periods, and may need to obtain a court or tribunal order. Self-help evictions are generally prohibited.
Read the complete guide▶What are the rent increase limits and caps in Indonesia?
Indonesia has specific rules governing when and how landlords can increase rent. These rules may include caps on the percentage of increase, minimum notice periods, and restrictions on frequency. Landlords must comply with all applicable regulations when raising rent on existing tenancies.
Read the complete guide▶What are the security deposit rules and return deadlines in Indonesia?
Indonesia has rules governing how much landlords can charge as a security deposit, how deposits must be held or protected, and the timeline for returning deposits after a tenancy ends. Landlords must provide itemized statements of any deductions and comply with all statutory deadlines to avoid penalties.
Read the complete guide▶What are the mandatory lease requirements in Indonesia?
Lease agreements in Indonesia must comply with applicable national and local laws. Required elements typically include the names of both parties, property description, rent amount and payment terms, deposit details, lease duration, and maintenance responsibility allocation. Written leases may be required for certain tenancy types or durations.
Read the complete guide▶What are the landlord maintenance and repair obligations in Indonesia?
Landlords in Indonesia are generally required to maintain rental properties in a habitable condition, keeping the structure, plumbing, electrical systems, and essential services in proper working order. The specific allocation of maintenance responsibilities between landlord and tenant should be clearly documented in the lease agreement.
Read the complete guide▶What are the late fee and penalty rules for rental properties in Indonesia?
Indonesia has specific rules regarding late fees and penalties for overdue rent. These may include mandatory grace periods, caps on late fee amounts, and restrictions on interest charges. Late fee provisions should be clearly stated in the lease agreement and must comply with local regulations to be enforceable.
Read the complete guide▶What property disclosures are landlords required to make in Indonesia?
Landlords in Indonesia must disclose relevant information about the property to prospective tenants before the lease is signed. Required disclosures typically include known material defects, environmental hazards, previous damage history, and any conditions that could affect the tenant's use and enjoyment of the property.
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