Between January and June this year, the agency found that more than 85 percent of the 241 complaints it handled were related to private property transactions, ranging from landed houses to apartments.

The cases were lodged by consumers from throughout the lower, middle and upper-middle income segments, with house prices implicated in the cases ranging from Rp 250 million (US$17,247) to Rp 120 billion.

BPKN head Ardiansyah Parman said the violations were the combination of high demand for housing, consumers lacking knowledge of their rights and responsibilities and unscrupulous developers trying to take advantage of ignorant customers.

“There are consumers who have been living in a house for tens of years and even completed their mortgage payments, but could not get their hands on the house certificates,” Parman said in Jakarta recently, attributing the problem to the vast development of housing since the early 2000s.

The estimated total value of house ownership being disputed, which stands at 207 cases, could reach Rp 1 trillion, agency data shows.

Parman said the government had established adequate laws to regulate housing, but it was lacking in supervision and legal enforcement.

“The regional administrations also need to be more responsive to housing issues in their areas as many consumer issues fall under their jurisdiction,” he said.

BPKN vice chairman Rolas Sitinjak said half of the cases reported had fortunately been resolved through the agency mediating between buyers and developers, even though it did not have any legal power to punish fraudulent players.

Rolas said the BPKN forwarded its recommendations in early July to related organizations, namely the Public Works and Housing Ministry, Trade Ministry and Financial Services Authority, urging them to intensify their supervision and legal enforcement to prevent unscrupulous developers from stepping on the rights of consumers.

“As for consumers, the two main things a house buyer should see before paying is the house certificate and building permit of the house [...] these two are often the roots to all housing complaints we receive at the BPKN,” he said.

Rolas said the agency would meet with Bank Indonesia (BI) to express its concern on the latter’s decision to relax its loan-to-value ratio regulation as it would allow consumers to buy their first home with a zero down payment.

He argued homebuyers might have easier access to housing, but they did not yet have adequate knowledge on house buying.

Responding to the matter, Ignesjz Kemalawarta, deputy chairman for legislation and regulations at Real Estate Indonesia (REI), acknowledged that there were no solid methods for consumers to distinguish between legitimate and fraudulent housing developers.

To work its way around the problem, Ignesjz said his organization had started cooperating with BI to issue a rating mechanism and measure developers’ compliance.

“We need to work together with BI because the latter has all the data on developers’ prudence and non-performing loans,” he said on a separate occasion. “The rating system will reflect the trust the association and BI have [over developers].”

Ignesjz targeted that the rating system would be ready within a year, saying that the REI had met with BI Governor Perry Warjiyo in June to express its intentions.

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