The Legality of Land Transactions with Certificates Encumbered by Mortgage Rights

Abstract

The sale and purchase of land in Indonesia, particularly when
the land certificate is encumbered by a mortgage right, often gives rise to
legal complications. This study examines the legal validity of land sale
transactions in which the mortgage has not been officially discharged
(roya). By analyzing court rulings and statutory regulations, the study
aims to provide insights into the implications of such transactions,
especially concerning the protection of creditor rights and legal certainty
for buyers. This research employs a normative legal research method,
focusing on applicable legal norms and their implementation in practice.
The results show that while the sale of land encumbered by a mortgage
may be considered legally valid if the parties involved have fulfilled the
basic requirements of agreement, capacity, a specific object, and lawful
cause as stipulated in Article 1320 of the Civil Code, the transaction
remains legally risky if the mortgage is not officially discharged. This
study contributes to the discussion of agrarian law in Indonesia by offering
a deeper understanding of the legal nuances related to land transactions
burdened by a mortgage, and provides recommendations for legal
practitioners, academics, and other relevant parties