Legal Certainty of Under-Hand Property Rental Agreements (Leasing) between Indonesian Citizens and Foreign Citizens

This study aims to analyze the implementation of the rights and obligations of the parties in a private property lease agreement (leasing) between Indonesian citizens (WNI) and foreign citizens (WNA) at PT. MIMPI FAMILY LOMBOK, and to examine the legal certainty of the agreement under Indonesian positive law. This research adopts a normative-empirical approach, using statutory, conceptual, and sociological methods. The findings are: 1) The private property lease agreement between Mr. H. Odit Rachman Hakim (WNI) and Mrs. Elodie Chloe Severini (WNA) at PT. Mimpi Family Lombok was not formalized before a notary, but the agreement is still valid and legally binding. This validity is based on meeting the four conditions for a valid agreement as outlined in Article 1320 of the Civil Code: clear mutual consent, the parties’ legal capacity, a specific object, and a lawful cause. Although a private agreement is recognized as valid, its evidentiary strength is weaker compared to an authentic deed made before a notary, especially in disputes involving third parties. Restrictions on property ownership by foreign nationals through the Operating Lease scheme without option rights align with agrarian law, but the lack of notary involvement heightens the risk of disputes.