What is Real Estate, Its Types, and Required Documents

Real estate is an industry term that refers to immovable property, including land and buildings, as well as the natural resources associated with them, such as water. Generally, real estate ownership is a business and investment that can generate significant profits.

What is real estate? In Indonesian, real estate is also called "fixed property." However, real estate is an asset that can be bought, sold, or rented at a high price. For companies, real estate is considered a valuable asset. It includes various forms of property, whether for personal, commercial, or industrial purposes.

For Legal, Finance, General Affairs (GA), and Procurement teams, real estate is an essential element in company operations, whether as a business location, an investment, or an asset that must be well-managed. The management of real estate often involves transactions and documents that require high levels of accuracy and security.

This article will discuss the different types of real estate, the key documents involved, and how solutions like VIDA Sign can simplify real estate document management digitally.

Types of Real Estate

Although real estate refers to land and buildings, it is categorized based on its function. Here are the types of real estate you need to know:

Residential

This type of real estate includes properties used for residential purposes, such as houses, apartments, and condominiums. In residential real estate, the legal team is often involved in sales or rental contracts. Residential properties are also frequently used for home businesses.
Commercial

Commercial real estate includes properties for business activities, such as office buildings, shopping centers, and hotels. This type of real estate is closely related to procurement, which is usually involved in negotiation and property acquisition processes.
Industrial

Industrial real estate includes factories, warehouses, and distribution facilities. The departments most involved in managing this type of real estate are Legal, Finance, and Procurement. The documents involved are often more complex, including operational and environmental permits.
Agricultural

Since real estate includes land, areas used for agriculture, livestock, and forestry also fall into this category. This category requires specific documents, such as certificates for productive land.
Special Purpose

Some real estate serves specific functions, such as hospitals, schools, and places of worship. The Legal and Finance teams typically ensure that these properties comply with government regulations.

Important Documents in Real Estate Transactions

Every real estate transaction requires crucial documents to ensure the legality and validity of the process. Here are the key documents involved in real estate transactions:

Land Ownership Certificate

This certificate is an official proof of legal ownership of land or property issued by the National Land Agency (BPN).

Handling this certificate often involves the Legal team, which ensures the document's authenticity, confirms there are no ownership disputes, and verifies legitimate ownership.

Read also: Example of Documents with e-Meterai That Legal Teams Must Know
Deed of Sale and Purchase (AJB)

AJB is a legal document that formalizes a transaction between a buyer and a seller. This document is usually prepared by a notary or a Land Deed Official (PPAT). It serves as official proof of property transfer, minimizing future disputes.

In sale and purchase transactions, the Legal team ensures the document aligns with the agreement and contains no unfavorable clauses, while the Finance team oversees transactions such as taxes and administrative fees.
Building Permit (IMB)

This real estate document is mandatory before constructing, renovating, or changing the function of a building. Companies involve GA, Legal, and Procurement teams to ensure construction complies with permits.

The IMB ensures that buildings adhere to zoning and spatial planning regulations set by the government. Without an IMB, buildings risk being demolished or facing legal sanctions.
Land Measurement Certificate

This document provides detailed information on the size, area, and boundaries of land. It is usually issued by BPN. The Legal team ensures there is no boundary overlap with other properties.

This document helps prevent potential land disputes and ensures that purchased land matches the certificate details.
Land and Building Tax (PBB)

PBB is an annual tax that land and building owners must pay to the government. The Finance team ensures timely payment of PBB to avoid fines or penalties.

Proof of PBB payment is often required in various transactions, such as property sales or loan applications using property as collateral.
Lease Agreement

A lease agreement is a contract between a property owner and a tenant that outlines the rights and responsibilities of both parties. The Legal team drafts the agreement with clauses protecting the company from risks such as property misuse or contract violations.

Meanwhile, the Procurement team ensures the lease agreement terms align with the company’s operational needs.
Other Frequently Managed Documents

Besides the primary documents above, the Legal, Finance, and Procurement teams often handle the following documents:
- Location Permit – Required before purchasing or developing land.
- Credit Agreement – Used for property financing, with land or buildings as collateral.
- Construction Contract – Regulates agreements with contractors for property construction or renovation.
- Property Insurance – Protects properties from risks such as fires or natural disasters.

Why Real Estate Documents Need Digital Signatures

Real estate documents are highly sensitive and involve multiple parties. Additionally, they contain many crucial agreements.

A digital signature is not just a scanned or photographed signature—it carries the same legal weight as a wet signature, as regulated by the Electronic Information and Transactions Law (UU ITE) No. 11 of 2008. Digital signatures include an Electronic Certificate that verifies the signer's identity.

This means digital signatures can protect documents from forgery. Here’s why digital signatures are crucial in real estate document management:

Enhancing Security

Digital signatures include an Electronic Certificate that ensures the document remains unchanged after signing.
Speeding Up Administrative Processes

Signing becomes faster without the need for physical document printing or manual delivery. Documents can be signed anytime, anywhere.
Reducing Operational Costs

Digital signatures eliminate the need for printing, shipping, and storing physical documents.

VIDA Sign: A Solution for Real Estate Document Management

VIDA Sign is a digital signature solution designed to simplify administrative processes, including real estate document management. VIDA Sign’s signatures are certified by Kominfo and integrated with Indonesia’s national population data (Dukcapil).

Here are the advantages of VIDA Sign:

Accessible on Mobile and Desktop

VIDA Sign can be used on both mobile and desktop devices, allowing users to sign documents anytime, anywhere.
Document Templates

Having trouble creating documents? No worries—VIDA Sign offers hundreds of document templates that you can use repeatedly.
Company Stamp Feature

VIDA Sign provides a company stamp feature, ensuring real estate documents receive further validation.
Scanning Physical Documents

Have a physical document instead of a digital one? No problem! VIDA Sign allows you to scan physical documents using your phone’s camera and sign them digitally.