The Advantages of Properties with SHM Status

According to the Basic Agrarian Law (UUPA), there are various land tenure statuses. The right to land can be utilized by an individual for the use of the respective land, including the earth, water, and the space above it.


Article 16 of the UUPA provides an explanation that the right to land can be differentiated into: ownership rights, cultivation rights, building rights, usage rights, lease rights, mortgage rights, profit-sharing rights, land opening rights, and other rights that will be stipulated by law.


The right to land can be granted and owned by individuals, other individuals, or legal entities. All land rights grant authority to the owner to use the land specified in the certificate, but each right has its own characteristics. The boundaries and purposes of land use also vary from one right to another.


The strongest land tenure right is Ownership Right or commonly known as the Certificate of Ownership Right (SHM). According to Article 20 of the UUPA, the Certificate of Ownership Right for land or buildings is a hereditary, strongest, and fullest right that can be owned by an individual over the land.


Ownership right lasts as long as the certificate owner is alive. This is different from the status of the Right to Build, where the owner can only utilize the state-owned land for a certain period. The purpose is also limited, in accordance with the provisions stated in the certificate.


Here are the benefits you can get with a property certified with Ownership Rights:


  1. Full Freedom:

Owners of properties with SHM status have the freedom to make any changes to the standing buildings. This freedom is valuable for residents who want to settle for a long time or investors. With this freedom, property owners can renovate and make changes according to the occupant’s preferences. This freedom is crucial for buyers who do not want their property to be handled by others.


  1. High Resale Value:

The Certificate of Ownership Right increases the resale value of the house or property. SHM provides buyers with a sense of security when purchasing a property. With full authority over the property, SHM has a much higher value compared to the Right to Build Certificate. The freedom given to property owners can also enhance the resale value because the property can be used for long-term investment.


  1. Inheritable:

As explained in Article 20 of UUPA, the Certificate of Ownership Right has no time limit or is unlimited. When the certificate holder passes away, ownership can be passed on to the heirs. So, when the owner of the SHM property reaches the end of their life, they don’t need to worry that their property will fall into the wrong hands. The property can be inherited by their heirs. The transfer of ownership can occur if the heirs sell it to someone else.


  1. Can Be Used as Collateral:

Difficult situations are inevitable, and sometimes we may need to borrow from the bank. Banks usually require collateral in the form of valuable documents in the credit application process. In this situation, SHM is one of the guarantees that can be used for the credit application process. The application process can also be carried out quickly with the existence of SHM. The loan amount can also be approved for a higher value compared to not using SHM as collateral.

Ownership Rights (SHM), Property advantages, Land tenure

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