Bali Villa Permits, Zoning & Compliance Explained

Navigating Bali Property Permits: PBG and SLF Explained I am here to help you learn the things that I didn't know and I wish I would have known before I invested into Bali. I love investing into Bali. I love the whole idea of having multiple homes around the world. So I would love to have other people and in this journey doing same things and having multiple homes in Bali around the world, if this floats your boat and this podcast is there to just help you navigate the Bali opportunity. We are moving on to the conversation about the permits, the PPG and the SLF, because there's a lot of confusion about what's the real difference between the PPG and SLF. And just to give you guys an indication, like to get your property legitimately on Airbnb, it was discussed before that you must actually have permit that makes the building safe and allowed to do whatever it is that you intend to do on it. So people who talk about PPG and SLF, what is the real difference in simple terms? Speaker 2 They are connected in the sense that mid 2021 the government moved away from what we call an IMB or a bill permit, which was sufficient. There wasn't any SLF to it. But the build permit, the IMB is not what we call it PPG. So that is your actual build permit that should be processed and acquired prior to doing anything on the land. And people will argue it takes time. Whatever I think when I compared to my country, it's still. Speaker 1 Fair. How long does it take? Speaker 2 Again, it depends on what you what you feed the system with, but if you are in compliance in terms of what the system you know, wants to see in particular cosmetic outlook, technical MEP structure and so on, I would say three to four months. But if you have a lot of, you know, circumventions and different drawings away from that, then you may have find yourself that you're, you are the consultant needs to go to the public build ministry to explain. And it'll take longer with the new PP 28 that we talked about a little bit in the past, it should be a lot quicker because it'll issue it to you right away, subject to obviously having again, the, the sort of right drawings and, and aspects to it. Understanding SLF Delays and Ensuring Agent Transparency Once you have that, you can go ahead and build. And when you are at a minimum of 80% completion or fully completed, you can apply for the SLF which is then the activation code. So an SLF, there is a kind of a few different types of SLF. If, if it's for a residential house, it'll be for 20 years. If it's for a commercial property and what we talked about before, the Airbnb and short term rental, every five years you need to renew it. Speaker 1 That's the Villa one. Speaker 2 Villa, resort, whatever. Speaker 1 How long does that take the SLF process? Speaker 2 It shouldn't take long, but because everyone has kind of skipped the PVG or not everyone but a lot, there is a backlog on SLF and there is some challenges on obviously HR and enough people from being able to come and do the verification. So it may take quite a bit longer, six months, 12 months. I've heard about more. But I think then you get into a situation where there's actually something wrong in the whole application process, which very often it is. And why any developer, anyone who is in that situation should actually actively try to see what that is. So when you do a PPG application or an SLF final, people say, oh, here's the barcode, you're all good. You should have access to that account so you can see what has actually been uploaded, you know, technical drawings, MEP structure, whatever it is and where the process is with the public build ministry who issues that permit and there may be letters, they will come to that account as well. And they've requested you to come. Maybe your consultant was too busy or he forgot about it and that didn't happen. And that delays the process too. And sometimes I see quite a few PBGSLF consultants, they, they kind of keep that away from you and, and, and it's just an excuse because of what they have uploaded actually doesn't qualify them don't want to tell you that. And they go and try to figure it out by themselves. So that transparency to see what goes on in the system and how the agent then deals with the different challenges should be something the developer is Ware of and follows. Speaker 1 What if like you're not happy with your current SLF permit guy? Can we move it over to say someone like 7 stones if we wish to or how so? Speaker 2 We, we are not a certified PBG and SLF. We do it in house, but obviously we cooperate with architects and MPN structures and we're happy to to talk to anyone. But I think the key to this is that the account that is set up, you should be fully aware of what the password is and you can access that at any time. We've had a few cases where that switch has happened for different reasons, but with a process, we can actually get that PBGSLF application back to the one that actually did it. So like the owner of the property will be able to open that account again and continue the process. But that is also where you get into all this. Is it the landowner? Is it, you know, the PMA or who is it that is actually applying for it? Speaker 1 OK. So you guys don't do it, but you will just introduce a partner of yours to the investor? Speaker 2 The whole process, OK. So you will deal only with us, we will deal with the third parties, whether that is an, you know, SKA approved MEP or you know, whatever it is. And I guess the benefits of us or other agencies out there that that does a good job as well is that we deal directly with public building industries. And we will represent you into these conversations and make sure there is a good, good progress on on what the ongoing challenge may or may not be. Footprint Limits, Height Restrictions, and Commercial Villa Compliance For this SLF permit, I heard that you can only build 50% of on the land if it's a pink sign. Is that correct? Speaker 2 So for a pink zone in almost all areas the maximum footprint is 50 and some it's 60 but mostly 50. Speaker 1 Percent, OK. And so that means like 50%, even though some people are doing more, they're submitting like that, they're doing less. I see a lot of villas that are like. Speaker 2 I guess the I've seen extreme cases up to very high percentages and I also see more and more that because of the presence of the OSS taking more and more space in in in the governance of this, the public built ministry or pick up MOA eventually also needs to sign off on this. The SLF is actually it just stops because it's too crazy. And again, that's why some developers that have had issues, they should actually verify what that process is in the terms of an overbuilt. If that is reasonable. And I can't really determine what is reasonable, whether it's 60% or 70%, there is a penalty tax that you pay on that and you will still get your permits. But if it's like extreme, then it's difficult and you will eventually need the approval from the Bhupathi in your Regency who will then also need to have a legal justification of that, which is not easy and obviously has additional. Speaker 1 The 50%, it doesn't include the pool area around the pool area, the parking like it's the building footprint of like the bottom floor should be no longer than 50. Speaker 2 A pool will be included. Speaker 1 OK. Speaker 2 And that's why, you know, maybe you'll do the pool later, so it's part of the garden rather than, you know, the application level, things like that to maybe have more. Speaker 1 Justification, but should be. Speaker 2 The footprint of the building, yeah. Speaker 1 Well, so the footprint of the building, 50% is like that's the highest as well. That's at a pink zone level. Also there could be restriction like you can't build higher than 15 metres on a pink zone. Speaker 2 Normally it's 15 metres, in some it's 12, but mostly 15 metres. Speaker 1 And then now they've introduced last year 2 trees to be present. Oh. Speaker 2 There's an awful lot long list of what you need for the SLF. You know the garden, you know setbacks. Yeah, so there are. Speaker 1 And then the SLF guy came and started taking photos of fire extinguishers and started putting signage in the in the villas and I was like what is going on? Speaker 2 So it's a commercial SLF that then there is other compliance aspects that they look at so that you have guests, something happens, there's a fire, you know, how do people get out? Is there fire extinguishers? You know, all of the aspects that I think we're used to from home comes in to actually qualify. There's one point that I see a lot that you may be able to, you know, push through an SLF for now and it's not in accordance with what should be there. Don't forget that five years from now you need to renew that and there's other people sitting in the government office and there may be stricter enforcement. So it's very important that you follow that PBG, then SLF. Speaker 1 Process. Speaker 2 Yeah, reasonable compliance or full compliance if possible. Green Zones, Farming Land, and the Ideal Permit Application Process If you didn't follow it now and you're just doing the SLF process because you thought that was fine, how you said before, it should like 12 to 18 months right now, the wait time on this. Speaker 2 Process 12 months right now. But again, I I think that the delay on that has many different aspects. It may be related with the public build ministry, but most cases there are other issues that you're not aware of and you should verify those. Speaker 1 And there was all this rumour that you can't get any more any licences on green zones because they put a pause on it. Is that just false information based on? Speaker 2 So green zones, I think that's confusing with the conversion of farming land. So that particular relation to me is kind of the government saying that the existing regulations is now enforced by a regulation that says you should follow the old regulation, meaning that farming land shouldn't be converted or changed, zoning doesn't. Speaker 1 Doesn't have farming land. Speaker 2 Like a rice field can be converted like I'm sure you hear now in certain areas there is LSD you can put on tourism zone both here, Lombok and other places. But then also like to convert a farming land into a pink zone or a farming land into a yellow zone. What happens? You'll need to. If you are on farming land, you need to comply with the existing regulation of what it allows you to do in terms of footprint, kblis, business activity and so on. But it's not a full stop, no, no. Speaker 1 You can still do it as long as you follow the complaint. OK. So this whole permit process in summary is try to do the PBG now first, not try, you must do the PBG first and then SLF process after that. So you submit like you would in any first of all countries your plans. This is what I intend to build, get the approval and then build. And I see like professional companies now actually putting the PBG licence at the front of their construction so that they're like, hey, we're fully in compliant in what we're doing. And here's the number at the top of it. And then it's then you flow and go back and say, OK, I'm ready now I've completed my building 80% come and have a look at it. And then everything. This is the right way of doing development. Here is this process. So that's the best way and that's the easiest way. Let's, if you've got who you want someone to manage that you guys can manage it and you'll work with external parties to do all the MEP and the architect work, even though you technically should have had that built and should be given to you. But you're always having to get someone to do that for you, I think. Speaker 2 I think the the benefits is 1 managing those three different components to the communication to the people and three, maybe the justification of prices and how much you actually, actually pay for this. Yeah.