Indonesia Security Deposit Laws: Jaminan Rules

Within the Indonesian legal system, primarily governed by the Indonesian Civil Code (KUHPerdata), Government Regulation (PP) No. 44 of 1994, and Law No. 20 of 2011 on Flats (as amended by Law No. 6 of 2023), a security deposit (Uang Jaminan) is extremely common across the residential rental industry. There are no specific statutory limits; under the principle of Freedom of Contract (Article 1338 KUHPerdata), the procedure relies entirely on the contractual agreement between the landlord and the tenant.

Are Security Deposits Required?

Formal law does not mandate rental insurance or security deposits. However, in every market (especially Jakarta, Bali, Surabaya), this deposit is practically required to cover the risks of utility arrears and subsequent property damage.

Common Deposit Limits

Due to the freedom of contract, the limit depends on the duration and type of property:

• Short-Term Rentals (Kos, monthly flats): Usually equal to 1 month's rent.
• Yearly Rentals (Houses, Luxury Apartments): Typically ranges from the equivalent of 1 to 3 months' rent, or a flat fee like IDR 5,000,000 to IDR 20,000,000.

Allowable Deductions

In standard lease agreements, if the lease term expires without issue, the entire remaining deposit will be refunded. Deductions and obligations are legally grounded in Government Regulation No. 44 of 1994:

1. Failure to pay utility expenses (Article 13): The tenant is legally responsible for paying electricity, gas, water, telephone, and other utility costs during the occupancy period.
2. Repairs for damage (Article 8): The tenant is obligated to maintain the property and return it in good condition. Deductions are permitted for damage that exceeds normal everyday use (non-fair wear and tear).
3. Cleaning fees, if the residence is left in an improper state of sanitation.

Note that Article 9 of PP 44/1994 specifically prohibits the tenant from subleasing the property or changing its structure without written consent from the owner.

Return Timelines

In Indonesian law, there is no absolute statute determining that a deposit must be transferred within a specific number of days.

Under the principle of Freedom of Contract (Article 1338 KUHPerdata), this time limit must be fully detailed in a draft clause of the lease agreement (e.g., "The remaining deposit will be inspected and transferred no later than 14 calendar days after the final handover of keys").

Substantive Legal Guidance in Indonesia

Discuss the importance of a signed 'Berita Acara Serah Terima' (BAST) - the handover document that records the property condition. This is critical because the Indonesian legal system prioritizes the 'consensus' (musyawarah) between parties. Before taking legal action for breach of contract (Wanprestasi), a formal written warning (Somasi) is required under Article 1238 KUHPerdata. Failures to follow these steps can lead to your eviction being dismissed in the District Court (Pengadilan Negeri) or even result in criminal trespassing charges. Additionally, the role of stamp duty (Materai), governed by Law No. 10 of 2020, is paramount; a lease agreement must have a physical or electronic stamp of IDR 10,000 to be admissible as evidence in court. Owners must ensure these documents are kept in precise order as they are the first pieces of evidence requested in any litigation.

Compliance Strategy for Indonesia Property Managers

When managing properties in the Indonesian market, one must prioritize the 'Itikad Baik' (Good Faith) doctrine under Article 1338(3) KUHPerdata. 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 nuances between residential and commercial zoning (IMB/PBG) allows for better portfolio risk management, as each type carries different implications for long-term property stability and municipal compliance.

How Landager Helps

Landager tracks lease terms, automated somasi reminders, and Indonesian tax compliance - making it easy to stay compliant with Indonesia regulations.

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