In property transactions, you may often hear the terms Pengikatan Perjanjian Jual Beli (PPJB) and Akta Jual Beli (AJB). However, do you really understand the difference between the two? If you are looking to buy property, whether for personal use or investment, it is crucial to understand the functions and roles of these two documents, as they both play an important part in the property buying process. 

What is the difference between PPJB and AJB? Here’s the explanation:

Pengikatan Perjanjian Jual Beli (PPJB)

According to the website rumah.com, PPJB is a document made when the buyer has not yet fully paid the property price. This document includes information such as price, payment schedule, and conditions for the creation of AJB in the future. Through PPJB, the property certificate remains in the seller's name until all payment conditions are met. PPJB serves as a temporary binding to ensure the property is not sold to another party before the transaction is complete and AJB is signed before a Pejabat Pembuat Akta Tanah (PPAT), or Land Deed Official.

Akta Jual Beli (AJB)

AJB is an official document that signifies that the property sale transaction has occurred and is issued by PPAT, not by the Badan Pertanahan Nasional (BPN), or National Land Agency. When AJB is made, it means that the buyer has fully paid for the property and legally becomes the new owner. AJB is also required when processing the transfer of ownership from the seller to the buyer.

However, although AJB indicates a transfer of rights, AJB does not automatically become valid proof of ownership of the property. According to Law No. 5 of 1960 on Basic Agrarian Law, the valid ownership certificates are SHM (Sertifikat Hak Milik or Freehold Certificate), SHGB (Sertifikat Hak Guna Bangunan or Building Use Rights Certificate), SHGU (Sertifikat Hak Guna Usaha or Cultivation Rights Certificate), or SHSRS (Sertifikat Hak Satuan Rumah Susun or Apartment Unit Ownership Certificate). SHM holds the strongest ownership status, while SHGB and SHGU are time-limited, as their status is more like a lease.