Legal Risks of Buyback Execution in Underhand Land Investment Agreements: Hybrid Authentic-Digital Reform from the Perspective of Indonesian Agrarian Law
Keywords:
Underhand agreement, Land investment, Buyback scheme, Legal certainty, Investor protectionAbstract
The practice of land investment through buyback schemes utilizing underhand agreements has proliferated in Indonesia as a swift and cost-efficient alternative investment instrument, yet it is confronted with substantial legal uncertainty stemming from the inability to register rights with the National Land Agency (BPN) in compliance with Government Regulation No. 24 of 1997. This study aims to analyze the legal risks associated with the execution of buyback clauses within underhand agreements and to formulate a hybrid authentic-digital reform model designed to enhance legal certainty within the framework of Indonesian agrarian law. Employing a mixed methods approach with a sequential explanatory design, this research analyzes 150 court rulings pertaining to buyback disputes from the period 2018-2023 and conducts in-depth interviews with 25 stakeholders, encompassing investors, notaries, legal practitioners, BPN officials, and academics. The findings identify three predominant risks: default on repurchase obligations (52% of cases), double selling (30%), and evidentiary complexities (18%), with an average litigation duration of 2.8 years. The analysis reveals a systemic disjunction between the principle of contractual freedom enshrined in the Civil Code and the formal registration mandates of land law. A proposed hybrid reform model, which integrates digital validation mechanisms with established notarial authentication principles, garnered support from 92% of respondents as a viable solution. This study contributes to the scholarly discourse by advancing a hybrid regulatory framework that reconciles informal underhand practices with the BPN's digital infrastructure, while offering evidence-based policy recommendations to fortify legal certainty and investor protection within Indonesia's land investment sector
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