Almost no ruko (a shophouse, shop on the ground floor and living or office space above) can be used for a business as it stands. A food stall needs a kitchen and a drain. A clinic needs partitions for examination rooms. A clothing shop needs shelves, lighting, and a glass display.

This is where disputes over ruko rentals often begin. The tenant feels they spent a lot of money on someone else’s building, while the owner is surprised to find a wall knocked down. Both usually have a point, and almost all of it can be prevented with one written agreement before the workers arrive.

Under the Civil Code (KUH Perdata), a tenant must use the rented property like a good householder, for its agreed purpose (Article 1560). A tenant also may not misuse the property without permission (Article 1559). Altering the building without the owner’s approval falls into that territory.

So verbal consent isn’t enough. Make a renovation consent letter, or add an annex to the lease, that contains:

  • A list of works. For example, install gypsum partitions, replace the floor, add power points, repaint, fit a new rolling door.
  • A drawing or simple sketch for work that changes the layout.
  • Forbidden works. Usually knocking down structural walls, cutting columns or beams, and adding heavy loads on the upper floors.
  • A schedule and a person in charge. Who supervises the workers and when the work ends.
  • Both parties’ signatures and the date.

If the owner lives out of town, get approval by a clear message and keep a screenshot, then follow up with a signed document.

What can be changed freely and what needs calculation

Ruko renovation work falls into three levels.

  1. Light and removable. Paint, shelves, cabinets, lights, a signboard (check the local signage rules), and demountable partitions. A short consent is usually enough.
  2. Medium. New flooring, ceilings, permanent brick partitions, extra power points, plumbing, and bathrooms. These need written consent and an agreement on what happens to them when the lease ends.
  3. Structural. Removing load-bearing walls, cutting columns, opening a big gap in the facade, or adding a mezzanine. This needs the owner’s approval and an assessment by a structural engineer. Don’t leave it to a contractor’s guess.

Many rukos in Banjarmasin stand on soft soil and often have three floors. Extra load upstairs, such as a storeroom full of goods or machines, can speed up cracking. The signs are covered in reading wall cracks and ground settlement.

The building permit question

Changes that touch the structure, floor area, or function of a building usually involve a Persetujuan Bangunan Gedung (PBG, the building approval that replaced the old IMB). The building owner is the one who applies, not the tenant. The basics are in understanding PBG, the successor to IMB.

Not every interior renovation needs a PBG. Because the line depends on the type of work and local rules, ask the office that handles building permits in your city before you start, especially if the work touches the structure or facade. For some businesses, such as food or clinics, the business licence has its own building requirements too. More on this in renting a ruko for a business.

Who pays

There’s no fixed figure. There are only customs and the contract. The Civil Code says the owner must hand over the property in good repair and keep it usable (Articles 1550 and 1551), while small everyday repairs are the tenant’s (Article 1583). From that the split usually looks like this:

  • Owner: a leaking roof, structural damage, and basic building installations that fail for reasons other than the tenant’s use.
  • Tenant: everything built for the business, plus daily upkeep such as bulbs, taps, and hinges.
  • Shared: work that benefits both, for example replacing an old rolling door. Agree on the percentage before starting.

A scheme often used in long leases: the tenant pays for the big renovation and the owner gives a rent discount or a few rent-free months in return. If you use it, write down the cost, how it will be proven (receipts and photos), and what happens if the lease stops early. Without that, a tenant who leaves in year two feels cheated, and the owner feels they gave too much.

What happens to the renovation when the lease ends

This is the part most often left unwritten, and most often argued about.

As a general rule, a tenant may remove and take back what they added themselves, as long as it doesn’t damage the building (Article 1567). But a lease can say otherwise, and it usually does. The two most common patterns:

  • Back to original. The tenant removes partitions, patches holes, and repaints before handing back the keys. This suits work specific to one kind of business.
  • Left for the owner. Permanent work such as flooring, ceilings, and electrical wiring stays and becomes part of the building with no payment.

The second pattern is often agreed for renovations that make the ruko easier to rent out again. An owner who wants the ruko returned bare should say so from the start. A tenant who wants to take air conditioners, shelves, or machines should write that down too.

Clauses worth having in the lease

A few sentences that help prevent disputes:

  1. The tenant may carry out the works listed in annex A, and may not change the structure without new written approval.
  2. The tenant pays for the works, unless the annex says otherwise.
  3. Damage to the building caused by the renovation is the tenant’s responsibility.
  4. When the lease ends, items on list B go with the tenant, and items on list C stay in the building.
  5. The starting condition is recorded with photos and video, signed at handover.
  6. If the lease ends early, the unrecovered renovation cost is dealt with in a set way.

Lease clauses in general are covered in what goes in a rental agreement, and the security deposit that often covers damage is in rental security deposits, whose principles are similar for rukos.

Practical points during the work

  • Photograph the condition before you start, including the electricity and water meters.
  • Protect the floors and stairs, because workers carry heavy materials.
  • Make sure the workers properly seal any holes made for pipes or cables, especially near the roof.
  • Don’t send kitchen waste or paint into the neighbourhood drain.
  • Keep every receipt. Receipts are your evidence if rent is later reduced or damages are calculated.

If you already renovated without permission

Speak up before the owner finds out on their own. Show what was changed, offer to put it in writing, and ask whether the owner will approve it after the fact. Many owners accept it if the result is neat and doesn’t endanger the building. If the owner refuses, set aside money to restore the original state.

For owners: if you find an unapproved renovation, don’t switch off the power or lock the tenant out right away. Actions like that often become a new legal problem for the owner. Start with a written warning. The lawful steps are covered in a tenant who stops paying or won’t leave.

Closing

A renovation of a rented ruko goes well when three things are in writing before the workers start: which works are allowed, who pays, and what happens when the lease ends. That way the tenant knows the risk, and the owner knows the building won’t change beyond what was agreed. If you own a ruko in South Kalimantan and want to rent it out or get an opinion on the lease, the Vorneo Property team can help through the list-with-us page.