On the Debtor's side, among others:

  1. Bound by a promise, this is because the Debtor is bound by the promise stated in the cover note, such as submitting the encumbrance certificate to the creditor.
  2. Financial loss, this is because if the debtor cannot fulfill his promise in the cover note, the debtor may experience financial loss, such as being fined by the creditor.
  3. Legal dispute, this is because the Debtor can also be involved in legal disputes with creditors or third parties related to the rights to the collateral object.

On the Notary's side, among others:

  1. Violation of the code of ethics, this is because the issuance of a cover note by a notary can be considered a violation of the notary's code of ethics, because the cover note is not an authentic deed and does not have the same legal force.
  2. Disciplinary sanctions, this is because if a Notary is proven to have violated the code of ethics, disciplinary sanctions can be imposed by the Notary Supervisory Council, such as reprimands, warnings, suspension of office, or dismissal.
  3. Lawsuits, this is because the Notary can be sued civilly or criminally by parties who are harmed as a result of the publication of the cover note.
The Legal Force of Notary Cover Notes in Court
Image Illustration by Author

A cover note issued by a Notary/PPAT is not an authentic deed, but only a certificate issued by the Notary/PPAT office. This cover note serves as a temporary guarantee for the bank to disburse credit while waiting for the related deeds to be processed by the Notary.
A notary cover note is a certificate made by a notary that explains the process of making an authentic deed or a certain legal action. A cover note does not have the same legal force as an authentic deed, but it can be additional evidence and is entirely dependent on the judge's assessment in court cases. This is in line with the Supreme Court Jurisprudence Number 1108/K/Pdt/2003 which states that “a cover note is not valid for use as a basis for implementing the rights and obligations of the parties in the agreement because a cover note cannot replace a notarial deed.

References

  1. 1868 Civil Code
  2. Supreme Court Jurisprudence Number 1108/K/Pdt/2003
  3. Law on Notary Position (UUJN) No. 2 of 2014