How do you buy Bali property with a partner?

Buying with someone else is common in Bali, because the entry price for something decent is beyond what a lot of people want to commit alone. It is also where a large share of the disputes come from, and the reason is structural.

The problem the Indonesian system creates

In a country with a proper land register, joint ownership is recorded. Two names on a title, with defined shares, visible to anyone who looks.

A Bali leasehold is not registered anywhere. Hak Sewa is a contract, it appears on no certificate and no land office record.

So the question of who owns what between you is answered entirely by the documents you create. If you do not create them, it is answered by whoever is named in the lease deed and by whatever you both remember agreeing.

That is the whole risk, and it is entirely avoidable.

The three structures

Both names on the lease. Both of you are lessees, jointly. Simplest, and it means neither can deal with the property without the other — including selling, which cuts both ways.

One name on the lease, with a co-ownership agreement behind it. Common where one partner has residency or is present in Indonesia. It is also the structure where the unnamed partner has nothing but a contract against the named one, which needs drafting with real care.

A PT PMA holding HGB, with shares split. Cleanest for anything substantial or for more than two people. Ownership is recorded in the shareholder register, shares can be transferred, and there is an established framework for disputes. It carries the full company compliance cost, so it only makes sense above a certain value.

For anything above roughly USD 400,000, or more than two parties, the company route is usually worth the overhead for the clarity alone.

What the agreement must cover

Write this before you pay, not after.

Contributions. Who put in what, including the purchase, transaction costs, fit-out and any later capital spend. State it in figures.

Shares. What percentage each holds, and whether it changes if one party funds more later.

Income. How rental income is split, when it is distributed, and who holds the account it arrives in.

Costs. Who pays what, and what happens when one party cannot or will not pay their share of a capital item. This is the single most common flashpoint.

Use. Who gets which weeks, particularly peak weeks, and whether personal use is charged against that party's income share. Peak weeks are worth real money and "we'll sort it out" does not survive the second year.

Decisions. What requires unanimity and what one party can decide alone — choosing a manager, setting rates, approving a renovation, accepting an offer.

Exit. The most important clause, and the one most often missing.

The exit clause specifically

Without this, one partner wanting out can force a sale of the whole property at whatever the market offers, at whatever moment suits them.

The mechanisms that work:

Right of first refusal. The other party can buy the leaver's share at a defined price or an agreed valuation basis, within a defined period.

A valuation method, stated now. An independent valuer, a formula, or a process. Not "at market value", which is what people write and which produces an argument.

A shotgun clause, where one party names a price and the other chooses whether to buy or sell at it. Elegant, self-policing, and it requires both parties to have comparable liquidity.

A drag-along or tag-along, if one party is selling to an outside buyer.

A deadlock mechanism for when you cannot agree on anything.

Death and divorce

If a partner dies, does their share pass to their heirs, and are you comfortable owning a villa with them? The agreement should say what happens, and the lease itself must bind heirs and successors or the whole position collapses.

If a partner divorces, their share may become marital property and may be dealt with in a settlement you are not party to.

If a partner becomes insolvent, their creditors may reach the share.

None of these are pleasant to discuss and all are cheaper to address now than later.

Practical points

Get the agreement drafted by a notary you both engaged, in Indonesian with a sworn translation, alongside the lease deed and executed at the same time.

Keep contributions traceable — bank transfers from each party's own account, so there is a record of who paid what.

Open a joint account for the property, or agree who holds it and how the other sees the statements.

Agree an annual review, so small disagreements surface before they compound.

The honest advice

The people who fall out over a jointly owned Bali villa are almost never people who disagreed about the property. They fall out because one person's circumstances changed, they needed money, and there was no mechanism to get out.

Write the exit clause first. If the two of you cannot agree what happens when one wants out, you have learned something valuable before spending any money.