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How one property transaction in Bali went terribly wrong

I was wondering if I should write this story.  It is clear in my head now, so I thought I would jot something down before I forget about it.  If it helps just one person then I think it will be worth my effort.   I am sure most people reading this probably are thinking “this could never happen to me”, or “I would never make this mistake”.  Well, I hope it never does.

The transaction involved a foreigner buying a property through a nominee, from a Balinese who had a foreign partner.  A price was agreed upon and they made arrangements with a notary to finalize the sale.  Leading up to the sale however, the owner’s partner had to make an unexpected trip back to their country.  They planned to travel together, so they moved the meeting with the notary forward.  The owners actually made plans to fly out almost straight after the documents were all signed.

While the original owner was overseas, she checked her bank account to see if the money had come through from the sale.  When she checked her account however, she got a bit of a shock.  The sale price was about $200,000, but only $20,000 had been deposited to her account.  Not being able to get anywhere with the notary by phone, she flew straight back to Bali to try and sort out the problem.

The notary said he was only carrying out what he had thought was the agreed price – $20,000.  In the sellers haste to get to the airport, she hadn’t check the price in the selling agreement properly, so failed to notice that the price was missing a few zeros.  (I have written the amount in dollars to make it easier to read, but of course the transaction was done in rupiah).

The foreign buyer had actually given his nominee $250,000 to buy the property.  So now the nominee was up $230,000.  The nominee took the case to court and lost.  It did not deter him however from appealing and took the case to a higher court, two more times and lost again in both cases.  Fortunately for the owner, they had proof that they had agreed on the price of $200,000 and the court ruled in their favor.  Unfortunately for them, they had to spend a large some of money defending the cases.

The nominee of course was using his ill-gotten gains to pay for his lawyers.  The buyer was basically out of pocket $250,000 and I have no idea if he has been able to recover any of his money.

Sadly I think these kinds of scams happen too frequently.  Unfortunately I don’t believe there is enough awareness as many of the victims are too embarrased to report their case, or they don’t think there is anything they can do about it.  If you have experienced or heard of any property scams in Bali, share them in the comments.

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6 Responses to How one property transaction in Bali went terribly wrong

  1. Paul Keylard September 5, 2013 at 6:52 am #

    Hi there Henry,
    Indeed a similar situation occurred to us here in Australia (Cairns).
    To make a long story short, we did not look close enough to the agreed sold price for our house when we signed the papers. It was sold for $10,000 less by R.White R/E Smithfield 4870 Qld.
    Your frank and open comment is very much appreciated in regard of what happened in Bali. Well done!
    Cheers,
    Paul K.

  2. Michael Young September 5, 2013 at 2:47 pm #

    After long time in Bali with Indonesian ppartner I am now totally locked out of allmy assets around Indonesia..including seversl homes and 2 business ventures and land and all my pocessians. My dearest promised for years that if we split all would be shared 50 50…but all is out of reach and gets violent to the extreme if I try talk to her.Also has placed members of her family in my houses to secure them. Sadly she is bi polar I firmly believe and can be ok when she is not depressed and will say I need treatment. I still love her but life is far more peaceful when I avoid her and other women who all chasing one thing…money their first love. I was however tricked into a Muslim marriage which was never registered.I have reciepts for some early monies and leters about money I sent her. She was dirt poor when we first met her. Other problem is the law is not about justice in these cases and can drag on and on from what the press says. Would be nice just to get my Aboriginal paintings and Indonesian artworks back.But no…she has installed surveilance cameras…very sad…and I thank the happy side of her brain for all the wonderful loving times.The other side is cruel and ice cold sadly.

  3. Michael September 12, 2013 at 7:39 pm #

    I used a young balinese man’s name as a nominee. When i tried to sell the house he claimed i sexually harrassed him and wanted half the sales price. Luckily i paid a good lawyer to pay him a 2% commission. The police and lawyers said this is becoming a very popular way for indonesian men in Bali to get money by making false claims. Gay people must be very careful when befriending local men. Indonesian men know that they can make more money by being friends and then making false claims to the police to get money. Gay men are big targets, soon Indonesia’s gay men will be as sophisticated as those in Thailand.

  4. Cheryl Higgs September 15, 2013 at 3:01 am #

    Hi There,
    I wanted to share my story with everyone because I am very aware of NOT being able to purchase land in Bali and anyone that advises you that you can, is LYING to you. The only way to do it is to have a Balinese or Indonesian Nominee that will always own 1% of your land/villa and conveniently that person would or can disappear when you come to sell your property. I had land in Jimbaran Bay that I purchased with my then, Balinese Husband & my Brother & Sister inlaw, we shared the land 50/50. We bought this land in 2010 then in 2011 I separated from my Balinese husband. It cost me $6000. AUD to seek help from a Indonesian lawyer firm, to remove his name & offer a new nominee for my safety. Unbeknown to me these lawyers were scammers too, however our Notary Lawyer whom was a Balinese, felt for us & advised & protected our land, to ensure we didn’t loose it. Our Notary gave us the original land certificate before anyone (including our Indonesian lawyers) had seen it to get any details from it, so there was no chance of any fake copies being made. We held these documents until it came time to sell & then I employed Ray White Kuta to sell the land in January 2013. By March 2013 they had a buyer & the transactions were done & we got our money into our accounts by April 2013. All I can say is, it was a long hard road & we done about 12 trips in that 2 years making sure we didn’t loose our land investment. We are one of the lucky ones, and I am extremely grateful of our outcome. My advise to any foreigner is DON”T buy land in Bali just lease, as long as it’s 20 years or less the lease is true & can’t be stolen from you if it has the local Banjar (Council) stamp on it, and it’s much safer. Fortunately for us my brother was very smart and was one step ahead of would be thieves trying to get information on our land in Bali, because we could see how easily you could be tricked into loosing your land. The law over there does NOT protect or care if foreigners loose money, they just keep lining their pockets. Thankfully Ray White in Kuta where a great help and I would highly recommend them in helping any foreigner doing business in Indonesia. We even left Bali when our land was sold with a large transaction amount to be done by Ray White & we trusted them to do this, it was done with the utmost care & prompt payment was sent immediately on the next business day. If you do choose to buy land or property in Bali then do this one thing that would help you when coming time to sell, have your nominee sign the relevant documents in case you choose to sell and they are no where to be found. If they deny you this option then there intentions are to steal the property from you.. And make sure you hold the original certificate and don’t show it to anyone. One last thing, make sure you have a trustworthy Notary who does all the land transactions & paperwork correctly for you. I lived in Bali for 2 years and heard so many bad stories, so if I can be of help to anyone will advise then I would be happy to help, if I can. The Balinese can’t expect to get rich from stealing our hard earned money and not have a conscious about it. Us Aussies need to stick together. Good luck everyone but like I said earlier leasing is the way to go..

    Regards
    Cheryl

    • Mick.G September 29, 2013 at 12:43 pm #

      Hi Cheryl, I am very sorry to hear what happened to you, an all too familiar story. I have been lucky as from the moment i first entered indonesia (Kupang(Timor Barat)) I ended up staying with a family who did not speak a word of english so i was forced to learn very quickly not only the language which took about 3 weeks to become relatively competent for general conversation but also the machinations of the indonesian mind which can in some people and at some times be quite genuine and honest but at others appear exactly the same while the sneaky cogs are ticking behind that benign smile. In any case I am confident in my indonesian business and scam artist dodging abilities however I have no contacts in Bali as far as notaries or even friends go, yet would like to to live there and do business, have a house etc.(which i already had decided to contract and not buy, hehe ). If you know the name of any trustworthy notaries, lawyers, etc I would much appreciate it, and as always am available to help you in return or any other expat (except the mad ones….. you know what i mean :) for that matter as you are correct we really do need to stick together over there because at times it feels like there’s almost a whole country sticking together against us.
      Anyway my email address is poolhustlermick@hotmail.com I look forward to hearing from you or anyone with usefull information.
      Thankyou.
      Mick. G

  5. Peter July 4, 2014 at 6:21 am #

    There was this case of Masa Fukuda, a Japanese who got conned big time out of a 5-star hotel property in Seminyak. Was all over the Internet years ago but gone now so no idea what happened. All those nominee-deals are scams on both sides: the foreign buyer thinks he can circumvent the Indonesian law, and the Indonesian nominee may think he can get some easy money. If it comes to a crunch, the Indonesian will always come out on top because the foreigner broke the law by entering into such a transaction. In any case, such nominee transaction is based on nothing more than an unenforcable I.O.U. from the Indonesian who can or can not be trusted – and when such large sums of money are involved (even larger to an Indonesian than to us) whom can you trust? Not even your fellow-countrymen if the story I heard in Lovina some years ago where an Australian had entrusted an Australian builder who lived and worked in Bali with all his money to build him a villa. The Australian builder promptly absconded and the villa was never built. Anyway, what is this obsession we have with “owning” something whether we can legally own it or not? Leasing is by far the better option because one day you may have to leave Bali again for personal reasons or because they won’t renew your visa or you fall out with the people (beware of those smiles!) or for health reasons or because – are you listening? – if you live there permanently, all your income from anywhere in the world becomes subject to Indonesian income tax! By all means, live your dream but bear in mind that all dreams come to an end!

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