Understanding Fiduciary Guarantees in the Mortgage System

Understanding Fiduciary Guarantees in the Mortgage System

It is common that when you apply for a loan, of course you must have a guarantee. However, there are still many people who do not know one of the important guarantees, namely fiduciary guarantees.

Basically, a guarantee aims to ensure that the loan or credit that has been given can be paid in full in accordance with the agreed terms.

Therefore, a fiduciary guarantee is one of the conditions that must be taken into account when guaranteeing movable or immovable property.

This article will discuss more about the trustee in the mortgage system. Read on for the next article!

What is a Fiduciary Guarantee?

Buy a home loan
Buy a home loan

A trust warranty is a form of relinquishment of ownership of an asset based on trust.

The word fiduciary is actually taken from the Greek etymology, ie “faith” which means trust. Also, in Dutch, this term is known as Transfer of trust property (FEO) which has the meaning of trust property.

This means that even if a property has been transferred to another person, control of the property still belongs to the party who gave it.

This is also regulated in Law no. 42 of 1999 regarding the Fiduciary Guarantee. This guarantee is often applied when you decide to take a Home Ownership Loan (KPR) from the Bank.

Of course, you need to provide a guarantee on the house you buy in accordance with the applicable rules and regulations.

Also read: How to get land certificates through PPAT

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Legal Basis of Fiduciary Guarantee in Indonesia

Fiduciary guarantee
Fiduciary guarantee

As mentioned before, in Indonesia, fiduciary guarantees are regulated in Law no. 42 of 1999. The regulation states that the guarantee is a guarantee for movable assets, whether tangible or intangible or immovable.

Because it is regulated in detail by the Government of Indonesia, the fiduciary recipients will receive more priority when compared to lenders or creditors.

This is because all loan and loan transactions have been and the transfer of assets has been guaranteed by the current law. Therefore, debtors and creditors can transact securely.

However, a fiduciary agreement must be made, determined and formalized by a notary that has legal force. This aims to provide a guarantee of protection for both parties involved.

For borrowers or creditors, trust certificates are important as a legal basis if at any time the asset must be confiscated if the borrower is unable to repay the loan.

Meanwhile, for the borrower, a fiduciary certificate will be useful as protection if at any time the lender takes arbitrary action.

Generally, this is to avoid lenders from confiscating assets that are not in compliance with applicable rules or regulations.

If this happens, the borrower must immediately report the problem to the court for legal proceedings according to the rules.

Obligations of the Fiduciary Security Holder

The parties concerned with maintaining this guarantee have several duties and responsibilities in accordance with the applicable rules. Here are some of the tasks that must be carried out by the trustees:

  • For parties who accept fiduciary obligations on behalf of other parties intentionally, they must be responsible for managing assets that have been adapted to the interests of the owner.
  • Make sure there is no conflict between the asset holder and the fiduciary holder.
  • The fiduciary holder must provide an explanation regarding the original condition of an asset to be sold to the prospective buyer.
  • If the owner of the asset is deceased, the trust deed can still be enforced according to the existing provisions.
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Fiduciary assurance in the property industry

Assets that can be guaranteed in a trust deed are not only movable assets, but also real estate such as property.

For fiduciary cases in the property industry, this was stated in Law n. 4 of 1992 regarding Housing and Settlements.

In these rules, there are two types of houses included in the trust agreement, including:

1. Tread House

In Indonesia, where the agrarian law adheres to the principle of horizontal separation, it is possible for different properties of buildings and land.

In this way, the charge on the building can be carried out separately from the land so that the land house needs a fiduciary guarantee to provide legal certainty.

The law on the trustee requires that there be a written permission stating that the building on the land can be used as collateral.

This is of course very important in relation to the process of transferring rights and ownership when the loan has been paid.

In simple terms, a trustee for a land house can guarantee the land and the buildings erected on it.

2. Apartment house

Unlike the land house, the object of the guarantee from the plan is the unit. In this way, the trustee is only required to pay the loan for the apartment unit.

If the borrower or debtor has paid all the loans, the transfer of ownership of the unit can be done immediately.

However, it should be noted that this property does not include the land below, only the apartment units that are certified.

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Example of Fiduciary Guarantee in KPR

Johan decided to buy a house with a mortgage for a period of 10 years at a price of 600 million IDR from January 2020.

For seven years, Johan has never been behind in his monthly payments of IDR 5 million per month.

However, due to his declining business, Johan is no longer able to pay payments of IDR 5 million per month for almost 3 consecutive months.

So, does the creditor have the right to seize Johan’s property or assets?

The answer is no. This is because there are several steps or requirements for creditors to be able to seize the assets of the trustees, namely:

  • Creditors cannot take property assets arbitrarily because they have to go through a complaint process first.
  • The confiscation of goods or property in the form of a house can only be carried out if a letter of execution of confiscation has arrived from the court.


The fiduciary guarantee is a very important guarantee where the parties involved may have mutual rights and obligations. Especially in the case of KPR, a fiduciary certificate is important to ensure that no part is damaged.

In any case, if you want to buy a house with a mortgage scheme, it is highly recommended to consult with the bank first so that there is no confusion in the future.

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