Paying a Bali developer in installments: what to check

With a developer installment plan you pay for a villa in parts while it is being built. Most of the money leaves your account before the villa exists, so the contract and the schedule are what protect you.

Many Indonesians pay this way too. In Bank Indonesia’s survey of new homes for the second quarter of 2026, cash paid in stages made up 20.60% of purchases by value, bank mortgages 70.05% and one-off cash payments 9.35%. The survey covers 18 cities, Denpasar among them.

Why pay the developer and not a bank?

For a foreigner buying a leasehold villa, a local mortgage is usually not an option. The 1996 law on security rights over land lists the land rights that can be pledged for a loan: Hak Milik, Hak Guna Usaha, Hak Guna Bangunan and some forms of Hak Pakai. A lease is not among them. For most buyers that leaves two ways to pay, all at once or in stages to the developer.

The same survey shows where developers get the money to build: 73.28% from their own funds, 17.89% from bank loans and 8.83% from buyers’ payments. These are averages for the 18 cities. When buyers pay as the walls go up, their money can be a much larger part of the budget, so ask how the rest of the construction is financed.

What does a fair payment schedule look like?

Each payment should follow a stage of construction that you or your engineer can check: foundation, structure, roof, finishing. A payment due on a calendar date, whatever happens on site, moves the risk of delay onto you.

Leave a real part of the price for the end, due at handover and after the building has its SLF, the certificate that it is fit for use. Under the Building Law, a building may be used only once it has one.

Indonesian housing rules give useful numbers, although they were written for sales of houses and apartments, not leases. Under Government Regulation 12/2021, a developer that takes money before the preliminary sale agreement (PPJB) must tell the buyer when construction will happen, when the PPJB will be signed, and when the deed of sale will be signed and the house handed over.

The PPJB itself can be signed only when five things are certain: the land title, what exactly is being sold, the PBG building approval, roads and utilities, and at least 20% of the construction. That 20% is confirmed by a report from the supervising consultant. Until then, the developer may not collect more than 80% of the price.

Even to start marketing, the developer must have backing for the construction from a bank or a non-bank institution, confirmed by a support letter. Ask to see it.

What should the contract say about money?

The regulation lists what a PPJB must contain, from the price and payment terms to handover, cancellation and dispute resolution. For an installment plan, look closely at these points:

the account each payment goes to, which should belong to the company that signs the contract;
what triggers each payment, and who confirms that a stage is done;
the currency of each payment and which exchange rate applies;
the handover date, the daily penalty for delay and any cap on it;
how force majeure is defined;
your right to cancel and the deadline for a refund;
what happens if you pay late.

What happens if construction is late?

Before the PPJB, Regulation 12/2021 lets the buyer cancel if the developer misses the construction schedule or the PPJB date. All payments must come back within 30 calendar days of the signed cancellation letter, and each day of delay after that costs the developer 1‰ of the amount. After the PPJB, if the deal falls apart through the developer’s fault, the payments must also be returned.

The Civil Code adds several rules that matter when a handover is late.

A developer is in default once you have sent a written demand, or as soon as the date passes if the contract says so (Article 1238). Ask for that wording, so that a missed date counts by itself.

Compensation is owed if the developer stays in default after that (Article 1243). If the contract sets a fixed sum as compensation, you cannot be awarded more or less than that sum (Article 1249). A penalty of a few dollars a day therefore limits what you can recover.

The developer owes nothing if force majeure stopped the work (Article 1245), but it has to prove that the cause was unforeseeable and not its fault (Article 1244). Read how your contract defines force majeure. If it covers permit processing or supplier delays, a late handover becomes easy to excuse.

A contract broken by one side does not end by itself either. Under Article 1266, the other side has to ask a court to cancel it, even if the contract has a cancellation clause. In practice, contracts often set this article aside so that the parties can end them without a court, Hukumonline notes. Check which way yours is written.

What if I cannot pay an installment?

Under Regulation 12/2021, if you cancel before the PPJB for a reason that is not the developer’s fault, the developer returns your payments but may deduct at least 20% of them, plus taxes already accounted for.

After the PPJB, if the deal is cancelled through the buyer’s fault, a buyer who has paid up to 10% of the price loses all of it. From a buyer who has paid more, the developer may keep 10% of the price.

For a leasehold villa these numbers may not apply, so read the late payment and cancellation clauses before the first transfer.

What if the developer goes bankrupt?

Installments do not remove this risk. Until the property is transferred to you, it can end up in the developer’s bankruptcy estate and be used to pay its debts. Hukumonline notes that buyers of houses and apartments have been treated as unsecured creditors in such cases, and cites World Bank research putting the recovery rate in Indonesia at 25 percent.

Bali has seen unfinished projects before. Terje Nilsen, cofounder of Seven Stones Indonesia, a firm that offers legal advice and market entry services, told The Jakarta Post in 2024 that the market had “an awful lot of ‘off-plans’ that did not get completed”. He also described cases where a contractor runs out of cash and goes bankrupt, or simply leaves.

Indonesian land law has no escrow rules of its own. A 2025 study in the Indonesian law journal Fundamental found that escrow for property is covered only by a 2018 Bank Indonesia regulation, not by the rules on land transfers. The protection that works in practice is to pay only for stages that are finished and to keep a real part of the price until handover.

FAQ

Can I get a mortgage on a leasehold villa?

Not from an Indonesian bank against the lease itself. The 1996 law on security rights over land does not list leases among the rights that can be pledged.

Is a booking fee refundable?

Under Regulation 12/2021, money paid during marketing counts toward the price. If the developer misses its own schedule, you get all of it back. If you change your mind, the developer may deduct at least 20%. For a lease, check what your contract says.

Who confirms that a stage is finished?

For the 20% threshold, the regulation relies on a report from the supervising consultant or a construction management consultant. Ask for a similar report before each payment, or hire your own engineer.

What if the developer wants most of the price up front?

For houses and apartments, the regulation caps payments at 80% until the PPJB conditions are met. A large early payment is a risk you carry yourself, so weigh it against the discount and against what is already built.

The rules and figures above are as of October 2026. Before your first transfer, have an independent lawyer read the payment schedule and the cancellation clauses.

Sunny Development Group has completed 10 projects on Bali, and three more are under way. The company counts its time on the market from 2011.