The recent closure and legal issues surrounding PARQ Ubud serve as a stark reminder of the critical importance of proper due diligence when investing in Bali real estate. This high-profile case highlights several key lessons for potential investors.
The PARQ Ubud Case
PARQ Ubud, often referred to as the “Russian Village,” was officially closed on January 20, 2025, after authorities found multiple violations of business and environmental regulations. The project’s director, Andrej Frey, was arrested on January 24, 2025, for illegally converting protected agricultural land.
The development, which included a 103-room hotel, residential complex, co-working spaces, and entertainment facilities, was constructed on 1.8 hectares of protected rice field land (LSD) and sustainable food agriculture land (LP2B). This violation led to criminal charges that could result in up to 5 years imprisonment and a fine of up to 1 billion Rupiah.
Essential Due Diligance
Conducting thorough due diligence is essential for any real estate investment. Begin your journey by researching market insights, consulting with legal professionals, or connecting with reputable real estate agencies in Indonesia. For a reliable start, consider working with AREBI-certified real estate agencies in Bali, which maintain professional standards and local market expertise.
PARQ Ubud’s development occurred on protected green zone land, highlighting the importance of understanding Bali’s zoning regulations. Our comprehensive guide explains how to interpret and verify land zoning classifications in Bali before making your investment decision.
Essential Due Diligence Steps
Land Title and Zoning Verification
- Verify land certificates (SHM) and their legitimate status
- Confirm zoning regulations and permitted land use
- Check for any protected status or agricultural designation
Legal Compliance
- Ensure all building permits (IMB) are in place
- Verify business licenses and operational permits
- Check for any outstanding taxes or fees
Environmental Assessment
- Evaluate environmental impact and restrictions
- Check for protected agricultural status
- Assess infrastructure availability and access rights
Remember, while Bali’s real estate market offers attractive opportunities, thorough due diligence is non-negotiable for protecting your investment and ensuring legal compliance.
