The Position of SEMA No. 3 of 2023 and Creditors Pursuit of Legal Certainty in Stalled Apartment Pre-Project Selling Disputes
Over the past decade, the property sector – particularly high-rise residential developments- has witnessed a surge in unfinished apartment projects. The marketing practice known as Pre-Project Selling (PPS), in which units are sold before construction begins, has become one of the main sources of problem. Many consumers and creditors have suffered financial losses due to projects being halted, developers failing to fulfill their obligations and prolonged disputes in court.
This phenomenon is not merely a business issue, it also raises questions of social justice. Consumers often find themselves in a vulnerable position, while developers hold advantages in terms of information and capital. In this context, the Supreme Court issued Circular Letter (SEMA) No. 3 of 2023 as a guideline for judges in handling property disputes and insolvency/bankruptcy cases involving developers.
Yet, a critical question remains: doses this SEMA truly guarantee legal certainty for creditors – especially apartment buyers?
The Position Status of Supreme Court Circular Letter (SEMA) No. 3 of 2023 In Property and Bankruptcy Disputes
SEMA No. 3 of 2023 was issued by the Supreme Court as an internal administrative guideline or directive binding within judiciary. In terms of legal hierarchy, a SEMA is not considered legislation but rather a technical directive that judges are required to follow in order to ensure uniformity in the application of law.
Position Status of SEMA:
·Binding internally on all judges throughout Indonesia (serving as top-down guidance).
·Does not establish new legal norms, but provides direction on how judges interpret and apply existing law.
·Cannot annul, amend or override Law No. 37 of 2004 on Suspension of Debt Payment (PKPU) and Bankruptcy.
In the context of apartment developers, this SEMA clarifies that petitions for PKPU or Bankruptcy against developer do not meet the requirement of “simple evidence” as set out in Article 8 paragraph (4) of the PKPU Law. In effect, this means that developers cannot easily be declared bankrupt solely on the basis of consumer creditor petitions.
On one hand, the SEMA aims to prevent misuse of PKPU petitions as a tool to pressure developers. On the other hand, it has been criticized for potentially limiting creditors – particularly consumer buyers – from obtaining a swift and certain legal remedy.
Impacts of Supreme Court Circular Letter (SEMA) No. 3 of 2023 on Creditors and Consumers
1.Consumers restricted from filing PKPU/Bankruptcy Petitions.
Before the issuance of SEMA, many consumer creditors filed PKPU petitions in order to: secure certainty of payment; compel developers to restructure their debts; and ensure the appointment of a curator/administrator to oversee the developer’s assets and obligations. With this SEMA, PKPU petitions are no longer considered to meet the requirement of “simple evidence”, making rejection highly likely. As a result, creditors lose one of the most effective instruments for resolving disputes with defaulting developers.
1.Extended Uncertainty in Stalled Projects.
If developers cannot enter the PKPU process, then: debt restructuring cannot take place; construction delays become more prolonged; consumers increasingly lose hope of receiving the units they have paid for, ultimately exacerbating social and economic losses within society.
1.Potential Excessive Protection for Developers.
This SEMA may be seen as perpetuating structural imbalances between businesses and consumers. Non-compliant developers can still evade stricter legal processes, thereby reinforcing unequal positions in property disputes.
Creditors Efforts to Obtain Legal Certainty
Although SEMA No. 3 of 2023 restricts the use of PKPU petitions, creditors still have several strategic legal channels to pursue their rights. The following are key points that prospective clients should be aware of:
1.Civil Lawsuit for Breach of Contract.
Creditors may file a lawsuit to demand: refund of payments; compensation for losses; enforcement of contractual obligations; or cancellation of the sales and purchase agreement (PPJB). While this process can be time-consuming, it remains a legitimate and effective legal instrument.
1.Class Action/ Collective Lawsuit.
When large numbers of consumers are affected by stalled projects, collective lawsuits offer efficiency by: reducing litigation expenses; strengthening collective bargaining power; expediting proceedings since the court addresses the matter in a single consolidated case.
1.Complaints to BPKN, YLKI or Ministry of Public Works and Housing (PUPR).
Creditors may request intervention or recommendations from state institutions particularly in cases where: developers violate PPS regulations; operate without proper permits; or engage in sales lacking complete legal foundations.
SEMA no 3 of 2023 was intended as a judicial guideline to standardize the handling of property and PKPU disputes. In practice, however, it has generated greater uncertainty for creditors and consumers by limiting their right to file PKPU petitions against developers. For communities affected by stalled projects, the resolution process becomes longer cost increase, and legal certainty grows more elusive. Consequently, creditors require precise and strategic legal assistance to identify the most effective path toward resolution.
