Please be advised that, by means of Law No. 13/2017, of 5 June 2017, the National Parliament of Timor-Leste approved the special rules for the definition of immovable property ownership rights, which enters into force on 3 September 2017. This new law is aimed at recognizing and granting the first ownership rights over immovable property, and clarifying the legal status thereof. The new legal framework further acknowledges the existence of previous ownership rights (informal customary rights and rights acquired due to long-term possession, as well as formal rights previously granted by both the Portuguese and Indonesian administrations). The possession is also acknowledged as grounds for awarding ownership rights and determining compensation in cases of overlapping rights.
The law establishes, amongst others:
- Rules applicable to the granting of ownership rights over immovable property in disputed and undisputed cases.
- Distinction between primary previous rights (informal ownership rights, full ownership rights and hakmilik) and secondary previous rights (aforamento, hamilik, hakguna-bangunan and hakguna-usaha).
- Possession rules for the purposes of defining ownership rights over immoveable property.
- Compensation and reimbursement mechanisms for (i) holders of previous rights who have not been granted an ownership right, and (ii) possessors to whom an ownership right has not been granted.
- Creation of the Land and Property Commission for the assessment of disputed cases.
- Rules for registration of in rem rights and issuance of real estate certificates – the National Properties’ Register.
- Rules on who may own property rights, pursuant to which ownership rights can only be granted to Timor-Leste citizens and legal persons organized and existing under Timor-Leste law and whose share capital is exclusively held by national citizens.
- Rules applicable to immovable property held by foreign individuals and legal persons.
- Rules on property falling within the public or private domain of the State.
- Rules on community protection areas and community immovable property.
This new statute is an important enabler for real estate development and investment in the country, which can finally move ahead. Although foreign ownership of land is still limited by the new Land Law, Timor-Leste law provides for a number of solutions that may be used by investors to successfully structure real estate projects.
Should you require any additional clarifications on this new legislation, please contact: