Handing a villa to a manager: the management agreement

This page is for a foreigner who owns or leases a villa in Bali and lets a manager run it for guests, or plans to. A manager here is a person or a company that finds guests, receives the money, looks after the villa and its staff and deals with the authorities for the owner, for a fee. The page sets out the written law with the article, and says where we found it silent or found two texts that do not fit together. It is general information, not legal advice.

No statute is written for the villa management agreement, and the Civil Code does not name it. The page therefore reads the general rules on contracts (KUHPerdata Pasal 1313 to 1340), the rules on the mandate called pemberian kuasa (Pasal 1792 to 1819), the Commercial Code (KUHD) for a person who acts in his own name for another's account (Pasal 76 to 79 and 85a), and the licensing, tax, immigration, labour and tourism texts that touch the business.

Three things are on other pages and are not repeated here: the licence of a guest business, who may run it, the building and the Bali duties, with the hotel tax rates and the foreign guests' reporting (the page on renting a villa to guests); the lease side (the page on leasing); and the tax dates (the page on tax deadlines). Employing villa staff (contracts, wages, THR and BPJS) is on the page on employing staff; this page names only the points that touch the agreement.

Not covered: the name, fees or results of any management company, how to choose one, revenue of any villa and the price of any service. The page names no company. Where it says that no text says something, that is a statement about the texts we read, listed in the sources of each section; the section "What we could not confirm" lists the open points.

The Civil Code has no chapter on a villa management agreement, and none of the texts we read uses the words. The general rules apply. An agreement made in line with the law binds the parties like a statute, can be withdrawn only by both of them or on grounds the law sets, and must be carried out in good faith (Pasal 1338). It binds also what the nature of the agreement requires by fairness, custom or law (Pasal 1339), and only the parties who made it (Pasal 1340). It is valid only if there is consent, capacity, a defined subject and a lawful cause (Pasal 1320). In general a person can bind himself only for himself (Pasal 1315), which is why the first question is whom the manager binds when he deals with a guest, a supplier or a worker.

A mandate. A mandate (pemberian kuasa) is an agreement by which one person gives another the authority to do something in the name of the giver (Pasal 1792). It may be given by notarial deed, private writing, letter or orally, and the other side may accept it silently by carrying it out (Pasal 1793). It is free unless agreed otherwise (Pasal 1794). A mandate in general terms covers only acts of management; to transfer the property, to mortgage it, to settle a dispute or to do anything only an owner can do, express words are needed (Pasal 1796), and the agent may not do anything beyond it (Pasal 1797). The owner must carry out the obligations the agent made within the authority, and is not bound by what went beyond it unless he approved it expressly or silently (Pasal 1807). An agent who told the other party of his authority is not liable for what goes beyond it, unless he bound himself personally (Pasal 1806). The owner may sue directly the person with whom the agent dealt in that capacity (Pasal 1799). The Code does not say whether letting a villa to guests is an act of management within a mandate in general terms; our reading is that the mandate should name the acts it covers.

A commission agent. The Commercial Code (KUHD) knows a person who carries on a business of making agreements in his own name or his firm's name, for a fixed fee (upah atau provisi), on the order and at the cost of another (komisioner, Pasal 76). He need not tell the other party who bears the cost, and he is directly liable to the other party as if the matter were his own (Pasal 77). The person who gave the order has no claim against the other party, and the other party cannot claim from him (Pasal 78). If the commission agent acted in the name of the person who gave the order, their rights and duties, also towards third parties, follow the Civil Code chapter on the mandate, which Pasal 79 calls "Pemberian Amanat" (the copy of the Civil Code we read titles Chapter XVI "Pemberian Kuasa"; we read them as the same chapter). Pasal 85a applies several of these rules to a person who does the same without making it a business.

Whether a manager who books guests in his own name, for instance on his own account of a booking platform, is a commission agent, an agent under a mandate or neither, no text we read says. It depends on what the contract says and on what the manager does. We state the two models and do not say which applies.

Services. Pasal 1601 sets apart agreements to render certain services, which follow the special provisions made for them and the agreed terms, and, where there are none, custom. A management agreement may be read as such a service agreement as well, so the written terms carry most of the weight. If you hold the villa on a lease and do not own it, first check whether the lease lets you hand the house to guests or to a manager at all; the pages on renting a home (section "Who may let a home to you") and on leasing set out the rules.

A business needs a registration number (NIB) and the licence for its activity. The regulation on risk-based licensing defines a business actor (Pelaku Usaha) as an individual or a business entity that carries out a business or an activity, and the NIB as the actor's proof of registration for carrying out the activity and its identity in carrying it out (PP 28/2025 Pasal 1 angka 11 and 12). The tourism law defines a tourism entrepreneur as a person or group of persons who carries out a tourism business (UU 10/2009 Pasal 1 angka 8). Accommodation is a tourism business, and as amended in 2023 the law makes it the entrepreneur's duty to hold the licence (Pasal 14(1)(f), 15(1) and 26(1)(n) as amended by Perppu 2/2022, enacted by UU 6/2023, Pasal 67). The licence therefore follows the person who carries out the activity. Which person that is when an owner hands the running of the villa to a manager, the texts do not say in so many words.

The activity code of a villa describes private houses let specifically to tourists with their facilities and "dikelola sendiri oleh pemiliknya", managed by the owner himself. The words are the same in KBLI 2020 (code 55193) and in KBLI 2025 (code 55203) as OSS shows them, and the tourism standard for the villa activity opens with them (Permenpar 6/2025 Lampiran I, standar Villa, angka 1). The page on renting a villa to guests gives the codes, the licence and the open question of who may run the business. One point is added here: the description of the code assumes an owner who manages the house himself, and we found no text that describes a villa managed by someone else.

Fee-based management of real estate has codes of its own. KBLI 2020 68200 covers real estate on a fee or contract basis, including real estate management. KBLI 2025 68292 covers the management of residential real estate on a fee or contract basis, which OSS describes as supervising and coordinating the operation, maintenance and repair of the residence, drawing up and collecting residents' dues, budgets and house rules. The trade standard for 68200 treats property management as a supporting service of a property brokerage company, which must be a legal entity with an NIB and certified experts, and it says that the management of real estate with a residential function follows the housing law (Permendag 33/2025 Lampiran I, standar KBLI 68200, angka 1, 2 and 4).

None of these texts says that such a licence covers receiving guests, setting the prices and running the stays of a villa as a tourism business, and none says that it does not. Whether a manager that runs guest stays holds a licence of its own, works under the owner's licence, or needs both, the texts we read do not settle. Ask OSS or the licensing office of the kabupaten, and your notary, and get the answer in writing. Who may hold a villa licence at all, including the question of a foreign-owned company, is on the page on renting a villa to guests and is not repeated.

A manager who acts under a mandate must report to the owner on what he has done and give an account of everything he received by virtue of the mandate, even what is not due to the owner (Pasal 1802). He must carry out the mandate while it has not been revoked and answers for the costs, losses and interest if he does not (Pasal 1800). He answers for negligence as well as for intent, the liability of an agent who is paid being heavier than that of one who is not (Pasal 1801). He must pay interest on money he used for himself from the day he began to use it, and on money he must hand over when the account is closed from the day he is declared in default (Pasal 1805).

The owner must reimburse the advances and costs the manager spent to carry out the mandate and pay the fee if one was agreed, even if the manager did not succeed, unless the manager was negligent (Pasal 1808). He must compensate the losses the manager suffered in carrying out the mandate if the manager did not act carelessly (Pasal 1809), with interest on advances from the day they were paid out (Pasal 1810). Until everything the manager can claim under the mandate is paid in full, he may hold back property of the owner that is in his hands (Pasal 1812).

The fee. A mandate is free unless the parties agree otherwise (Pasal 1794). If a fee is agreed but not stated expressly, the agent may not ask more than the rate the Code sets for a guardian (Pasal 1794): 3 percent of all income, 2 percent of all expenditure and 1.5 percent of the capital he received (Pasal 411). We found no other statutory ceiling for a villa manager's fee. The Code does not say whether the guardian's rate applies to a business that manages villas for a fee; a fee written as a formula takes the question away. The trade standard for businesses licensed under code 68200 says that the commission for property management is set by the written agreement of both sides, and that a commission in a written agreement must itemise the costs, including tax and other deductions (Permendag 33/2025 Lampiran I, standar KBLI 68200, angka 6 nomor 4 huruf c and d). It binds a business licensed under that code; whether your manager is one, ask for its NIB and codes.

Whose money it is and where it is kept. The Code requires the manager to account (Pasal 1802), but none of the texts we read says that guests' payments or deposits must go into the owner's account or into a separate account, or by when the manager must hand the net amount over. If the manager contracts in his own name, as the commission agent of KUHD Pasal 76 does, the guest's claim lies against him and not against the owner (KUHD Pasal 77 and 78). The rupiah rule for payments in Indonesia is on the page on financing a purchase; how it applies to guests who pay a booking platform in another currency we did not examine.

The duty to give foreign guests' data is the owner's and the manager's. The Act says that the owner or manager (pemilik atau pengurus) of a lodging must give data on the foreigners who stay there when an immigration officer or a police officer asks (UU 6/2011 Pasal 72(2), as amended by UU 63/2024), and the offence in Pasal 117 is committed by the owner or manager who does not. The APOA site says the same: the owner or operator of a lodging (pemilik atau pengelola penginapan) must report the foreigners who stay. The Act does not say that either may hand the duty to the other. A contract between them binds only them (KUHPerdata Pasal 1340): it can say who enters the guests in APOA and who pays if a fine falls, but nothing we read says that it removes the duty from the one the Act names (our reading). How to register, what to enter and the penalty are on the page on renting a villa to guests.

The guests' passport data are personal data. The data protection law (UU 27/2022) calls the person who decides the purposes of the processing and controls it the controller (Pengendali), and the person who processes the data on the controller's behalf the processor (Prosesor) (Pasal 1 angka 4 and 5). A processor must process on the controller's instruction, and that processing remains the controller's responsibility (Pasal 51(1) and (3)). The law does not apply to an individual's processing in a personal or household activity (Pasal 2(2)). Which of the owner and the manager is the controller of the guests' data, or whether both are, depends on who decides the purposes; no text we read says. What the manager may do with the data, how long it keeps them and what it hands back at the end belong in the agreement.

Hotel tax (PBJT). The taxpayer is the person or entity that sells, delivers or consumes the goods and services concerned; the subject of the tax is the consumer, the guest (UU 1/2022 Pasal 56(1) and (2)). PBJT is a tax the taxpayer calculates himself, and the return (SPTPD) must be filled in correctly and completely and submitted by the taxpayer (Pasal 5(2) and (5)). The elucidation of Pasal 56(2) adds a sentence for accommodation marketed by a third party: where a residence used as a hotel is marketed by a third party, the taxpayer is the owner or the party who controls the residence (pihak yang menguasai tempat tinggal) and delivers the accommodation service to the final consumer, not the provider of marketing or of management through a digital platform. Perda Gianyar 7/2023 repeats the sentence in the elucidation of its Pasal 24(2).

The sentence names a marketing or platform provider. It does not name a villa manager, and it does not define "the party who controls the residence". On its words a manager who only markets and collects is not the taxpayer. Whether a manager who runs the house as the host, in his own name, is a party who controls the residence, no text we read says. The elucidation is not repeated in the Perda of Badung and Tabanan: their elucidation of the article on the taxpayer says only "cukup jelas", clear enough, and we do not say how those regencies apply it. The texts we read do not say that a manager's collecting the money, or filing the return for the owner, moves the tax to the manager. The registration, the returns and the dates of the four areas checked are on the pages on renting a villa to guests and on tax deadlines.

National taxes. A taxpayer may act through a representative or an attorney. A document sent to the tax office by an attorney (kuasa) must have a special power of attorney (surat kuasa khusus) attached, and the attorney signs with his own electronic certificate or authorisation code (PMK 81/2024 Pasal 7(2) and 10(4)). A mandate in general terms (Pasal 1796 above) is not that document: the tax rule asks for a special one.

Income tax and VAT. The final tax of PP 34/2017 on rent does not cover income from lodging services (pages on leasing and tax deadlines). What tax an owner owes on the income from guests, whether it is counted before or after the manager's fee, whether the fee is subject to withholding and whether VAT applies, we did not research. Ask a tax adviser.

The villa's staff (cleaners, a gardener, security, a house manager) are employed by someone: the owner, the manager or a separate company. The Manpower Act defines an employer (pemberi kerja) as a person, entrepreneur, legal entity or other body that employs workers and pays wages or other compensation, and an employment relationship as the relationship between the entrepreneur and the worker on the basis of a work agreement, with the elements of work, wage and order (UU 13/2003 Pasal 1 angka 4 and 15).

A company may hand part of the work to another company by a written outsourcing agreement (alih daya). The relationship between the outsourcing company and the workers it employs rests on a written work agreement; their protection, wages, welfare, working conditions and disputes are then that company's responsibility; and the outsourcing company must be a legal entity holding a licence from the central government (UU 13/2003 Pasal 64 and 66 as amended by Perppu 2/2022, enacted by UU 6/2023, Pasal 81 angka 18 and 20). The page on employing staff reads them together with Constitutional Court decision 168/PUU-XXI/2023 and names the outsourcing rules of Permenaker 7/2026.

Whether a manager who staffs your villa is an outsourcing company, or only your agent who hires and pays staff in your name, the texts we read do not say. If the manager hires in the owner's name under a mandate, the owner must carry out the employment obligations the manager made within the authority (KUHPerdata Pasal 1807).

The tourism rules add that a tourism entrepreneur must give priority to local products, give local workers the opportunity and raise workers' competence through training (UU 10/2009 Pasal 26(1)(g) and (h), as amended). The mandatory items of the villa standard include giving priority to local and domestic labour ("mengutamakan tenaga kerja lokal/dalam negeri", Permenpar 6/2025 Lampiran I, standar Villa, angka 6 huruf a nomor 2). Wages, social security and the religious holiday allowance (THR) are on the page on employing staff, and the work permit of a foreigner on the staff is on the page on working legally in Indonesia; the page on health insurance covers BPJS Kesehatan.

Anyone whose unlawful act causes loss to another must make it good if it was his fault (KUHPerdata Pasal 1365), and answers for negligence as well as for acts (Pasal 1366). A person answers also for the acts of those who depend on him and for things under his supervision; employers and those who appoint others to represent their affairs answer for the loss caused by their servants or subordinates in the work given to them (Pasal 1367). The owner of a building answers for loss caused by its collapse, whole or in part, if it happens through negligence in upkeep or through defects in its construction or layout (Pasal 1369).

The Code does not say whether an independent management company is a servant or subordinate of the owner, or whether the owner is a person who appoints another to represent his affairs in the sense of Pasal 1367. Who answers to a guest for what a manager did is therefore not settled by the texts we read, and the rule on a collapsing building is the owner's by its words.

The tourism law puts on every tourism entrepreneur the duty to give guests comfort, hospitality and protection of security and safety (UU 10/2009 Pasal 26(1)(d), as amended), and to give insurance protection to tourism businesses whose activities are of high risk (Pasal 26(1)(e)). The tourism standard for the villa activity is headed "Tingkat Risiko Menengah Rendah", medium-low risk (Permenpar 6/2025 Lampiran I, standar Villa). We found no text that makes insurance compulsory for a villa, or that obliges a manager to insure the owner's villa. Who insures the building, the contents and the liability to guests, and in whose name, is therefore a term of the agreement.

How a mandate ends. It ends by the revocation of the agent's authority, by the agent's notice that he stops, and by the death, guardianship (pengampuan) or bankruptcy of the owner or of the manager (Pasal 1813). The article also lists the marriage of a woman who gives or accepts a mandate; we found no official statement on whether that item still applies and leave it aside. The owner may revoke the mandate when he wishes (Pasal 1814). A revocation that is only told to the manager cannot be set against third parties who dealt with him without knowing of it (Pasal 1815). Appointing a new agent for the same matter revokes the first agent's authority from the day the appointment is told to the new agent (Pasal 1816).

The manager may release himself from the mandate by telling the owner. If the notice, because he ignored the time or for another reason that is his fault, causes the owner loss, he must compensate the owner, unless he could not continue the mandate without considerable loss to himself (Pasal 1817). Acts done in ignorance that the mandate has ended are valid, and obligations made with third parties in good faith must be met (Pasal 1818). If the manager dies, his heirs who know of the mandate must tell the owner and take the steps the situation needs in the meantime (Pasal 1819). The manager must finish what he had begun when the owner died, if delay would cause loss (Pasal 1800).

These two texts do not conflict. The general rule (Pasal 1338) lets an agreement be withdrawn on grounds the law sets, and Pasal 1814 is a ground of that kind: the owner may revoke a mandate when he wishes. The open questions are different. One is whether a clause that fixes a term or a notice period, or says that the mandate cannot be revoked, waives the right in Pasal 1814. The other is whether the manager can claim damages when the owner revokes early. The Code answers neither. We do not choose between the readings. Write the term, the notice and the cost of leaving early into the agreement, and ask your notary how they will be read.

What the manager may keep. Until everything he can claim under the mandate is paid in full, the manager may hold back the owner's property that is in his hands (Pasal 1812). The text does not say whether the guests' money, the keys, the licence papers or the guest data are such property. Write down what is handed over and by when, and that a dispute about money does not stop the return of keys and records.

A power that outlives the relationship. A management mandate needs no power to sell or mortgage the villa; that would need express words (Pasal 1796). The page on selling and leaving sets out why a power of attorney that cannot be revoked and amounts to a transfer is a ground on which a PPAT refuses the deed.

Handover. No text we read lists what a manager must hand back. The accounts of a villa on booking platforms are not mentioned in any official text we read. The checklist above names the items to write down.

Start in writing. A debtor is in default when warned by a written order or a similar deed, or by the terms of the obligation itself (Pasal 1238), and damages for not performing are owed from when the debtor, although declared in default, remains in default (Pasal 1243). Cancellation of an agreement for non-performance must be asked of the court, also where the agreement states the condition (Pasal 1266), and the injured party may choose between forcing performance and asking cancellation, with damages (Pasal 1267). The page on renting a home uses the same articles for a lease.

A clause for arbitration. If the parties agreed to arbitration in a document they signed, the district court has no authority to hear their dispute (UU 30/1999 Pasal 2, 3 and 4(2)). Only disputes in the field of commerce, about rights that the parties control fully under the law, can go to arbitration (Pasal 5(1)). We do not say whether a dispute under a management agreement is in the field of commerce for this rule. Read any clause on arbitration and on the court before you sign: it decides where a claim is heard.

The courts, mediation, the complaint to a notary, the police and the customary village are on the page on disputes and complaints. We found no official register of villa managers and no complaint office for them. A manager licensed as a property agent is supervised by the Ministry of Trade (page on how to check a professional).

Which licence a manager that runs guest stays for an owner needs, whether the owner's NIB and Sertifikat Standar are enough, and which activity code the manager's NIB should carry. The OSS descriptions of the villa and real estate management codes, the tourism standard and the trade standard do not say. We found no official statement from OSS, the investment ministry or the tourism ministry.

Whether a manager who books guests in his own name is a commission agent under the Commercial Code, an agent under a mandate or neither, and whether the chapter that KUHD Pasal 79 calls "Pemberian Amanat" is Chapter XVI of the Civil Code (our reading, from the matching rules).

Whether letting a villa to guests is an act of management under KUHPerdata Pasal 1796, and whether the guardian's rate of Pasal 411 applies to a business manager when the fee is not stated.

Whether a clause that fixes a term or makes the mandate irrevocable waives the owner's right to revoke under KUHPerdata Pasal 1814 (a ground the law sets, within Pasal 1338), and whether the manager has a claim for damages when the owner revokes early.

Who is the hotel tax taxpayer when a manager, not a platform, runs the stay, and whether "pihak yang menguasai tempat tinggal" covers a manager. We read the Perda of Badung, Gianyar and Tabanan; the saved copy of the Denpasar Perda has no text layer and was not read for this point. The other five kabupaten were not checked.

Income tax on the villa's income, whether the manager's fee is subject to withholding, and VAT on the fee or on the stays: not researched.

Whether a manager may use one APOA account for several villas, and in whose name a villa is registered when a manager runs it. The APOA pages we read say that the owner or operator reports; they give no instruction for a manager.

How the rupiah rule applies to guests who pay a booking platform or a manager in another currency: not examined.

Whether a manager that staffs a villa is an outsourcing company under UU 13/2003 Pasal 64 and 66, and how the data protection law applies to guests' data between owner and manager: the implementing regulations of UU 27/2022 were not read.

Any rule of Bali or of a kabupaten written for villa managers, and any official rule on insurance of a villa: we found none in the texts read, and the search was not exhaustive. Only UU 10/2009 Pasal 26 was read on insurance, not the insurance law or the rules of OJK.

The copy of the Civil Code we read (the kejari-sukoharjo copy also used on the page on leasing) has scanning errors in some words. We read every article cited here in full; we did not find a second official copy.

To the manager before you sign: Which entity signs, with which NIB number and which activity codes, and does it hold the certificate for them? Whose licence will the guest business run under, and will you show me the documents? In whose name will you contract with guests, suppliers and staff? Into which account is the guests' money paid, and when do I receive my share? May I see the monthly statement and the documents behind it? What exactly is the fee a share of, and what is deducted first? Who employs the staff, and by which contract? Who registers for the hotel tax and files each return? Who enters foreign guests in APOA? Who insures the building and the guests' claims? What happens to the keys, the listings, the guest data, the staff and the licence papers if we end the agreement?

To your notary: Does a clause on the term, the notice or early ending waive the owner's right to revoke in Pasal 1814, and would the manager then have a claim for damages? Is the manager's licence enough for what it does? Does the mandate name every act, and is a special power of attorney needed for the tax office? Is any clause on arbitration or on a court clear to me in a language I read?

To the licensing office and the revenue office of the kabupaten: Which licence does a manager who runs guest stays need, and who registers for the hotel tax when a manager collects? Please give the answer in writing.

Keep the agreement, every statement, receipt and written answer. They are the proof you will be asked for.