Legal Reconstruction of Buyback Guarantee Regulation to Improve Certainty and Protection for Investors and Developers in Indonesia

Abstract

The Buyback Guarantee mechanism has become an essential instrument in the property and housing sector, particularly in facilitating developers’ access to financing and enhancing investor confidence. This clause, commonly included in cooperation agreements between banks and developers, serves as a form of repurchase assurance that reflects the principles of freedom of contract and prudential banking practices. However, the absence of explicit legal regulation regarding Buyback Guarantee agreements in Indonesian law has created potential legal uncertainty and imbalance in the protection of both developers and investors. This paper study aims to analyze the current legal framework governing Buyback Guarantee arrangements and to propose a model of legal reconstruction that can ensure greater certainty, fairness, and protection for the parties involved. Using a juridical-normative research method with a descriptive and analytical approach, this research examines statutory regulations, contract law principles, and banking prudential norms as the basis for legal reform. The findings indicate that the Buyback Guarantee clause, though legitimate under the principle of freedom of contract, requires clearer regulation to prevent misuse, asymmetric risk distribution, and legal ambiguity in implementation. Therefore, a reconstructed legal framework emphasizing transparency, standardization of clauses, and supervisory mechanisms is needed to strengthen legal certainty and investor protection within Indonesia’s property financing ecosystem.