Due Diligence Checklist for Buying a Villa in Bali — What to Verify Before You Sign

Most Bali property problems are not caused by bad luck. They are caused by due diligence that was skipped, rushed, or left entirely to the seller's own representatives.

The checks below are what stand between a sound purchase and the kind of mistake that is expensive or impossible to undo. This is a practical checklist — it applies to any foreign buyer, and every item on it should be verified by legal counsel who is working for you, not for the developer. None of it is optional, and the cost of doing it properly is trivial against the cost of getting it wrong.

Start at the foundation: the underlying land certificate. Confirm what type of title the land carries (Hak Milik freehold held by the Indonesian owner, in most leasehold cases), that the certificate is genuine and registered, and that the person selling or leasing actually holds the right to do so. Title fraud and disputed ownership are real risks; verifying the certificate at the land office is non-negotiable. Our guide to leasehold versus freehold explains the title types.

Land in Bali is zoned, and not all land permits villa construction or tourism-related short-term rental. Buying land or a villa in a green zone (protected agricultural land) or a zone that does not permit tourism accommodation can mean the property cannot legally be rented, or in some cases cannot legally exist as built. Verify the zoning designation and that it permits your intended use before anything else proceeds.

For a leasehold purchase, the lease agreement is the asset. Verify the exact term (typically 25 to 30 years), the start date, and — most importantly — the extension provisions. Is there a contractual right to extend? At what cost? On what terms? A lease with no clear extension path is a depreciating asset that will be worth far less in year 15 than at purchase. The extension clause is where the long-term value lives.

Confirm the property is free of mortgages, liens, unpaid taxes, or ongoing legal disputes. An encumbered title or a property subject to a boundary or inheritance dispute can entangle a buyer for years. Your notary checks this at the land office as part of proper due diligence.

For a developer purchase, especially off-plan, the developer's track record is critical. Have they completed projects on time and to specification? Have they honoured lease extensions for earlier buyers? Are there completed projects you can visit and earlier buyers you can speak to? A developer with a real, verifiable history is a different proposition from a first-time or unknown operator. Our guide to questions to ask a Bali developer covers this in depth.

Confirm the property has, or will have, the correct building permit — the PBG (Persetujuan Bangunan Gedung), which replaced the older IMB system. A villa built without proper permits carries legal risk and can be difficult to rent, insure, or resell. For off-plan purchases, confirm the permits are in place before construction begins.

Due diligence is not only legal. Verify the income assumptions independently: do not accept the developer's projected yield at face value. Check comparable rental performance in the area, model net rather than gross, and account for the wet season and management fees. Our guide to the real cost of owning a villa in Bali provides the framework.

Verify exactly who funds go to, when, and through what account. Be cautious of any request to pay into personal accounts or to route money in ways that bypass proper documentation. For an Indian buyer, the remittance should flow through the LRS via an authorised dealer bank with a clean paper trail, as covered in our LRS guide.

Every item above should be verified by a notary or lawyer engaged by you, independent of the seller. The developer's representatives are not working for you, however helpful they appear. Independent verification is the single highest-value step in the entire purchase, and the buyers who skip it to save a small fee are the ones who account for most of the cautionary tales. Once due diligence is clean, the rest of the process — covered in our step-by-step buying guide — is straightforward.

• Indonesian land law: Hak Milik, Hak Sewa and Hak Pakai classifications — ATR/BPN
• Indonesian building permit framework: PBG (Persetujuan Bangunan Gedung) — SIMBG