Thread: Building villa but don't own the land.

I have some land on Lombok I would also be happy to let you build a villa on for 50/50 profits :lol: :wink:

Hmmm, sounds like a good deal for her. There was a good thread a while back about how someone lost their house to a "friend". Sorry, don't have the time now to find the thread.

Here's the thread. Google works better than the forum's search feature.

http://balipod.com/business-bali-f21...bud-t1166.html

At first reading it didn't sound too bad but once I thought about it the whole thing is a recipe for disaster - let me count the ways and sorry to be so negative but if you want good news go to FOX.

Originally Posted by Ashta

she has been given some. As she could never afford to build on that land she made the suggestion that she provides the land,

Whose name is the land register in? If it's hers then OK, if it's still in the family's name WATCHIT. Any brother can come along later and say he didn't agree so it's all null and void. Note the term "brother", men are much more equal here than others, so your good friend being a woman has immediate disadvantages to the deal anyway.

Originally Posted by Ashta

we build a villa on it and we go 50/50 on all costs/profits

How you going to do this? Say each put $50k into an escrow account at the local lawyer's offices - who picks the lawyer? How do you get the money to pay running costs? Are you building or is your "friend"? If your "friend" then how are you controlling it all - through receipts? Good luck! If your friend doesn't have enough to build how can she go 50/50?

Originally Posted by Ashta

any suggestions as to whether it is possible to legally cover this type of situation whereby we would own the villa and she would own the land

Get her to agree to a 25 year lease on the land with yourselves as sole owners/leasees and to participate in the 50/50 deal get her to waive the lease fee completely and you pay for the building of the house with the 50/50 profit split written in to the contract as finders fee for sale. You pick the Notary/lawyer in Ubud there are enough.

Be careful! Good luck.

her land value is 3 times as much as the money we're putting in

At least where I am living, land is still quite cheap relative to the building cost. Be careful how your friend estimates the building cost. There could be a very big difference in the costs in building the type of villa you want and a typical Balinese house.

The questions I would be asking myself:

- How well do I really know this person?
- Do they have any debts?
- Would you build a house on someone else's land in your own country? Someone that you met on holiday?
- Why not just buy the land from your friend?
- What's your motivation for building the villa? To make money? To help your friend out?
- Is the owner of the land really your friend's mother?
- How are you going to manage the build?
- And so on...

I am sorry for being cynical but I have met well meaning foreigners here who went into business with locals and while they may not have lost money, the local partner is not being 100% honest. Other locals who have at least to my knowledge been very honest, but the business deal hasn't worked exactly as planned. Nothing like the disaster that the woman in Ubud had, but nonetheless quite different expectations in the deal.