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COMMANDITAIRE VENNOOTSCHAP AS SUBJECT OF BUILDING RIGHTS TITLE: ISSUES WITHIN THE FRAMEWORK OF LEGAL NORMATIVITY?

*Rian Saputra  -  Senior External Research Fellow, Faculty of Law and International Relations, Universiti Sultan Zainal Abidin, Malaysia
Dora Kusumastuti  -  Faculty of Law, Universitas Slamet Riyadi, Indonesia
Nilam Firmandayu  -  Faculty of Law, Universitas Gadjah Mada, Indonesia
Tiara Tiolince  -  Master’s Program in Notary Law, Faculty of Law, Universitas Sebelas Maret, Indonesia
Zepiko Ferera  -  Undergraduate Law Student, Faculty of Law, Universitas Slamet Riyadi, Indonesia
Jose Gama Santos  -  Faculty of Law, Universidade Dili, Timor-Leste
Open Access Copyright (c) 2026 Masalah-Masalah Hukum under http://creativecommons.org/licenses/by-nc/4.0.

Citation Format:
Abstract

The issuance of Circular Letter of the Minister of Agrarian Affairs and Spatial Planning/National Land Agency No. 2/SE-HT.02.01/VI/2019 concerning the granting of Building Use Rights to Commanditaire Vennootschap (CV) raises legal concerns regarding the limits of administrative discretion, the principle of legality, and the hierarchy of legal norms in Indonesian land law. The Circular Letter was introduced to facilitate investment by allowing CVs to obtain Building Use Rights; however, this policy potentially conflicts with Law No. 5 of 1960 concerning Basic Agrarian Principles and Government Regulation No. 18 of 2021, which limit the holders of Building Use Rights to Indonesian citizens and legal entities established under Indonesian law. This study examines the legal validity of the Circular Letter as an administrative policy instrument and analyses whether the recognition of CVs as holders of Building Use Rights represents a lawful exercise of governmental discretion. The study focuses on the concept of freies Ermessen, the requirements for exercising discretion under Law No. 30 of 2014 concerning Government Administration, and the application of the General Principles of Good Governance. The findings demonstrate that administrative discretion does not grant unlimited authority to government officials to create new legal subjects or modify rights established by higher-ranking regulations. The Circular Letter exceeds the legitimate scope of discretion because it substantively expands the category of Building Use Rights holders without explicit statutory authority. Although the policy objective of facilitating investment constitutes a legitimate governmental interest, such objective cannot override the principle of legality and legal certainty. This study concludes that the recognition of CVs as holders of Building Use Rights requires comprehensive legal reform rather than administrative policy. Amendments to the Basic Agrarian Law and related regulations are necessary to establish a clear legal basis while maintaining consistency, accountability, and certainty within the Indonesian land law system.

Keywords: Administrative Discretion; Circular Letter; Building Use Rights; Commanditaire Vennootschap; Land Law Reform

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