Rent an Apartment with Dollar Rates, Should I Pay in Rupiah?

PERTANYAAN

My friend rented an apartment in Indonesia. The apartment has foreign management and a dollar rate. Meanwhile, a currency law has been enacted that requires payment in rupiah. The lease has been running for 2 years; during these 2 years, my friend paid with dollars. The lease term agreed in the agreement is 5 years. How should my friend respond to this? Does my friend still have to pay the rent of the apartment in rupiah?

INTISARI JAWABAN

Basically, every payment transaction and any financial transaction carried out in the territory of the Republic of Indonesia must use rupiah. This has been expressly regulated in the Currency Law. Then, are there any exceptions to the use of rupiah in relation to your question?

Please read the review below for a further explanation.

ULASAN LENGKAP

This article is an English translation of Sewa Apartemen Bertarif Dolar, Haruskah Bayar Pakai Rupiah?, written by Dian Dwi Jayanti, S.H. and was published on Tuesday, 1 August 2023.

This article is the second update of the article entitled Do you have to Pay in Rupiah to Rent a Dollar-Rated Apartment?, written by Diana Kusumasari, S.H., M.H. and was first published on Saturday, 16 July 2011.

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Obligation to Use Rupiah

Basically, every transaction that has a payment purpose or any financial transaction conducted in the territory of the Republic of Indonesia must use rupiah as stipulated in Article 21 section (1) Currency Law.

Furthermore, the provisions of Article 23 section (1) Currency Law stipulate that:

Every person is prohibited to refuse in accepting Rupiah whose handover is intended as payment or to settle an obligation which must be settled with Rupiah and/or for the other financial transactions in the Territory of the Unitary State of the Republic of Indonesia.

The provisions shall be excluded for the payment or the settlement of an obligation in a foreign currency that has been agreed in writing.[1]

Furthermore, Regulation of Bank Indonesia 17/2015 regulates that the written agreement in question can only be made for:

1. transactions that are exempted from the obligation to use Rupiah as referred to in Article 4 and Article 5; or
2. strategic infrastructure projects and approved by Bank Indonesia.

Article 4 and Article 5 Regulation of Bank Indonesia 17/2015 read as follows:

Article 4

The obligation to use Rupiah as referred to in Article 2 section (1) does not apply to the following transactions:

1. certain transactions in the context of implementing the state revenue and expenditure budget;
2. receipt or provision of grants from or to foreign countries (abroad);
3. international commerce transactions;
4. deposits in the Bank in the form of foreign currency; or
5. international financing transactions.

Article 5

The obligation to use Rupiah as referred to in Article 2 section (1) shall also not apply to transactions in foreign currencies conducted under the provisions of the Law which include:

1. business activities in foreign currencies conducted by the Bank based on the Law regulating banking and sharia banking;
2. transactions in securities issued by the Government in foreign currencies in the primary market and secondary market based on the Law regulating state debt securities and state sharia securities; and
3. other transactions in foreign currencies conducted under the Law.

Therefore, in our opinion, your friend's lease transaction using foreign currency (dollars) is not allowed and violates the law, because it is not included in the exception for the use of rupiah or strategic infrastructure projects and has the approval of Bank Indonesia. Therefore, your friend should make lease payments using rupiah.

Sanctions for Not Using Rupiah

Then you should pay attention, the sanctions for people who do not use rupiah are regulated in Article 33 section (1) Currency Law, namely:

Every person who does not use Rupiah in:

1. any transaction which has payment purpose;
2. settlement of other obligations which have to be settled by using money; and/or
3. other financial transactions.

as referred to in Article 21 section (1) shall be sentenced with imprisonment for maximum of 1 year and subject to fine maximum in the amount of Rp200 million.

Every person is prohibited to refuse for accepting Rupiah whose handover is intended to settle as a payment or to settle an obligation which has to be settled by using Rupiah and/or other financial transactions in the Territory of the Unitary State of the Republic of Indonesia, unless due to doubt regarding the originality of Rupiah as referred to in Article 23 shall be sentenced with imprisonment for maximum of 1 year and subject to fine maximum in the amount of Rp200 million.[2]

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These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Law Number 7 of 2011 on Currency;
2. Regulation of Bank Indonesia Number 17/3/PBI/2015 of 2015 on the Obligation to Use Rupiah in the Territory of the Unitary State of the Republic of Indonesia.

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[1] Article 23 section (2) Law Number 7 of 2011 on Currency (“Currency Law”).

[2] Article 33 section (2) Currency Law.