Legal Literacy - This article discusses in depth about fiduciary as a form of guarantee on movable objects according to Law Number 42 of 1999, covering the basis law, object and subject of the guarantee, registration, execution, and implications of the Constitutional Court Decision Number 18/PUU-XVII/2019 in business practice, as well as solutions to overcome obstacles that arise in the execution of fiduciary guarantees.
Introduction
Fiduciary is one form of guarantee recognized in Article 1 paragraph (2) Law Number 42 of 1999 concerning Fiduciary Guarantees, where fiduciary is used as a security right over movable objects. Fiduciary is one of the most common forms of guarantee used in financial transactions, especially in sale and purchase agreements. In a fiduciary agreement, the debtor hands over movable objects to the creditor as collateral so that the creditor can ensure the repayment of the credit if the debtor cannot repay the credit. The existence of a fiduciary guarantee can be guaranteed and can be used as collateral for credit repayment.
Fiduciary has several characteristics, namely: 1) Fiduciary is a security right granted by the debtor to the creditor; and 2) Fiduciary can only be granted for movable objects. In Dutch terminology, the term fiduciary is often referred to in full as Fiduciare Eigendom Overdracht (FEO), which means the transfer of ownership in trust, while in English, it is called Fiduciary Transfer of Ownership. In Law Number 42 of 1999 concerning Fiduciary Guarantees, there are parties involved in fiduciary, namely the fiduciary grantor and the fiduciary recipient. The fiduciary grantor is the party that provides the fiduciary, while the fiduciary recipient is the party that receives the fiduciary. Fiduciary can provide benefits for both lenders and borrowers.
According to Law Number 42 of 1999 concerning fiduciary, fiduciary is the right of ownership of an object based on trust with the provision that the object whose ownership rights are transferred remains in the possession of the owner of the object. In a fiduciary agreement, the object used as collateral is goods that become the credit agreement. In the event of default, such as the debtor's inability to pay credit installments or repay the credit, or the transfer of the collateral object under the table, the fiduciary agreement provides protection to the lender to obtain the payments they should receive. The fiduciary agreement also gives the lender the power of executorial rights to revoke the fiduciary object without going through a court agreement if the debtor violates the agreement.
In business practice, fiduciary agreements are also used to protect the interests of creditors and ensure the repayment of debts between debtors and creditors. The fiduciary agreement is made at a notary with clauses that include the term of the agreement, the amount of credit to be paid, the method of payment, and the sanctions that apply if one of the parties violates it. If a person fails to repay a loan, there are several consequences that are received. Through this article, the author discusses in depth what fiduciary is and how the mechanism works in business practice.
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