Mortgages under Indonesian law

                                                            Mortgages under Indonesian law
                                                                              Author: 
                                                              Eka Priambodo, SH., MH.  
                          Advocates and Students of the Doctoral Program in Indonesian Islamic Law

      Mortgage is an additional agreement that is attached to a Financing Agreement between a creditor and a Debtor. Mortgage rights have an understanding regulated in Underwriting Rights Act No. 4 of 1996 and the Civil Code, as follows:      Article 1 paragraph (1) Underwriting Law:"Underwriting Rights on land and objects related to land, hereinafter referred to as Underwriting Rights, are collateral rights charged to land rights as referred to in Law No.5 of 1960 concerning Basic Agrarian Principles, as follows or not the following other objects which constitute a unit with the land for repayment of certain debts which give a priority position to certain creditors, to other creditors. "
      According to Article 1162 of the Civil Code:"Mortgage rights are a right of right over immovable objects to take compensation from them for the settlement of an agreement."

     Mortgage rights as a mutualism symbiosis that serves to guarantee and protect both parties, especially creditors. this is in accordance with the explanation in the Mortgage Rights Act No.4 of 1996 concerning Mortgage Rights on Land and Objects relating to Land, "guarantee rights imposed on land rights as referred to in Act Number 5 of 1960 concerning Basic Agrarian Principles, the following or not the following other objects which constitute one unit with the land, for repayment of certain debt, which gives a position that is prioritized to certain creditors to other creditors. "
      Whereas for collateral that can be used as Underwriting Right include Property Rights, Business Use Rights, and Building Use Rights, as well as the Right to Use.      With the existence of mortgages, creditors have rights that are protected by the Underwriting Rights Act, in which objects that are collateral and have been registered with Underwriting Rights give the rights of holders of mortgage rights to other Preferents by looking at the Underwriting Rights rating.

      The credit provided by the bank is the largest element of bank assets, which is also a major asset and at the same time determines the withdrawal of the bank concerned in carrying out its functions and its efforts to collect and channel public funds. [1] Credit has elements contained in the meaning of the credit, namely: [2]Trust, which is the belief of the bank on the achievements it gives to borrowing customers the funds to be repaid in accordance with the agreed upon at a certain time;

1. Time, i.e. there is a certain period of time between giving and repaying the credit, the time period beforehand is agreed or agreed upon between the bank and the borrowing customer;
2. Achievements and counterparties, namely the existence of certain objects in the form of achievements and counterparties at the time of reaching an agreement or lending agreement as outlined in a loan agreement between the bank and borrowing customer funds, namely in the form of money or bills measured by money and interest or compensation, or even without compensation for Islamic banks;
3. Risk, namely the existence of risks that might occur during the period of time between the granting and repayment of the credit, so as to secure the granting of credit and close the possibility of defaults from borrowing customers of funds, a bond is guaranteed.

      Agreements made between debtors and creditors are not only regulated in the Underwriting Rights Act. The creditor has an obligation to be careful in fulfilling the request for debtor debt. The attitude of banking caution is explained in the provisions in Article 8 of Act Number 7 of 1992 as amended by Act Number 10 of 1998, which can be known to further elaborate on sound credit principles and prudential principles. in relation to granting credit, namely: [3]

1. Having confidence based on in-depth analysis of intention and ability and ability of debtor customers to pay off their debts or return the intended financing in accordance with what was agreed upon;
2. Having and implementing guidelines for credit and financing based on sharia principles, in accordance with the provisions stipulated by Bank Indonesia.
3. Therefore, before giving credit, banks must carry out careful assessments of character (capacity), capital (capital), collateral (collateral) and business prospects of the debtor (condition of economy). [4]

      In the event the Debtor is declared not carrying out the obligation to pay installments to the creditor after the debtor is declared defaulted. whereas Default is known as the term broken promise, which is the obligation of the debtor to fulfill an achievement, if in carrying out the obligation is not affected by circumstances, the debtor is considered to have broken the promise. [5] Default occurs because of an error that is negligence and intentional. [6]

 neglect and deliberation. [7]
      When the debtor is unable to carry out the obligation to pay installments to the Bank, the creditor will make several remedies, namely administrative and legal efforts.
      Settlement efforts can be in the form of resolutions namely deliberation efforts, administrative efforts and efforts to resolve with legal efforts. Administrative settlement efforts are carried out by providing alternative solutions, namely (a) Rescheduling; (b) Reconditioning; (c) Restructuring.

         Whereas, for legal remedies carried out by creditors with efforts through (a) Committee for State Receivables Affairs; (b) Judicial Body; (c) Arbitration / Arbitration Settlement Agency.

 REFERENCE 

1. Djoni S. Gazali & Rachmadi Usman, Banking Law, Sinar Grafika, Jakarta, Second Print, 2012 
2. Yahman, Characteristics of Defaults & Fraud Crimes born of Contractual Relationships, Achievement of Pustakaraya, Jakarta, 2011. 
3. Law No.4 of 1996 concerning Mortgage Rights 
4. The Civil Code 
5. RBg and HIR 
6. Financial Services Authority Regulation No.29 / POJK.05 / 2014 concerning the Implementation of Business Financing Companies. 
7. Minister of Finance Regulation No.27 / PMK.06 / 2016.