The Legal Certainty of Covenote

Oct 13, 2025 by talynt.org 47 views

The Uncertainty of Covenote in Banking Credit Agreements: A Legal Perspective

In the realm of banking and finance, the covenote made by a notary or official of the land deed (PPAT) is often considered a crucial document for disbursing funds in credit agreements. However, the regulation regarding the covenote itself is not specifically regulated in the Notary Position Law, Government Regulation on PPAT, or in the Banking Law. This creates uncertainty and legal complexity in the implementation of credit transactions.

The Authority of Notary/PPAT in Issuing a Covenote

One of the main problems in this study is regarding the authority of the Notary/PPAT in issuing a cover for the benefit of the parties involved in the credit agreement. Based on the findings, the notary/PPAT does not have formal authority to issue a cover that can be used as a legal basis for credit disbursement. Publishing cover is more of a habit in practice and is not supported by clear regulations, giving rise to potential legal problems in the future.

The lack of formal authority in issuing a covenote raises concerns about the legitimacy of the document. If the notary/PPAT does not have the authority to issue a covenote, then how can it be considered a valid guarantee for the management of mortgage rights? This uncertainty is further exacerbated by the fact that the covenote is not registered in the existing laws and regulations, so that the truth of the information in it can be questioned.

The Legal Certainty of Covenote

Legal certainty related to covenote is highly questioned. Covernote often cannot be considered as a valid guarantee for the management of mortgage rights. This uncertainty is caused by the fact that the covenote is not registered in the existing laws and regulations, so that the truth of the information in it can be questioned. Therefore, banks and debtors must be aware of the risks that may arise due to this uncertainty when using covenote as a basis for credit disbursement.

The lack of legal certainty in covenote raises concerns about the security of credit transactions. If the covenote is not a valid guarantee, then what is the basis for disbursing funds in credit agreements? This uncertainty can lead to potential legal problems and disputes between banks and debtors.

The Legal Responsibility of Notary/PPAT

Legal responsibility is also an important thing in this context. If the handling of mortgage rights cannot be completed in accordance with the provisions in the cover, the debtor remains required to fulfill its achievements. Meanwhile, if there is an error or untruth of the information delivered by the notary/PPAT in the cover, then they can be subject to criminal sanctions. The sanctions can be in the form of a prison sentence of up to six years, disrespectfully dismissal, and the obligation to compensate for losses experienced by banks or creditors.

The legal responsibility of notary/PPAT in issuing a covenote is a critical issue. If the notary/PPAT is found to have delivered false or misleading information in the covenote, then they can be held liable for any losses or damages incurred by banks or creditors. This highlights the importance of ensuring that the information in the covenote is accurate and reliable.

Conclusion

From the results of research that uses this normative and descriptive analytical law approach, it is very clear that the issuance of covenote by a notary/PPAT in the context of banking credit agreements holds various risks and uncertainties. Because the Covernote does not have a supporting regulation, the parties involved must be careful and consider legal aspects before continuing with transactions that depend on this document.

Therefore, it is essential for all parties to understand the legal implications of the use of covenote and explore other alternatives that are safer and clearer in banking practice. This can include using other forms of guarantees or security, such as mortgage deeds or collateral agreements, which are more clearly regulated and provide greater legal certainty.

Recommendations

Based on the findings of this study, the following recommendations are made:

The Notary Position Law, Government Regulation on PPAT, and the Banking Law should be revised to provide clear regulations regarding the issuance of covenote by notary/PPAT.
Banks and debtors should be aware of the risks associated with using covenote as a basis for credit disbursement and should consider alternative forms of guarantees or security.
Notary/PPAT should be required to provide accurate and reliable information in the covenote, and should be held liable for any losses or damages incurred by banks or creditors if they fail to do so.

By implementing these recommendations, the risks and uncertainties associated with the use of covenote in banking credit agreements can be mitigated, and the legal certainty of credit transactions can be improved.
Frequently Asked Questions (FAQs) about Covenote in Banking Credit Agreements

In our previous article, we discussed the uncertainty of covenote in banking credit agreements and the legal implications of its use. Here are some frequently asked questions (FAQs) about covenote, along with their answers:

Q: What is a covenote?

A: A covenote is a document made by a notary or official of the land deed (PPAT) that serves as a guarantee for the management of mortgage rights in a credit agreement.

Q: What is the purpose of a covenote?

A: The purpose of a covenote is to provide a guarantee for the management of mortgage rights in a credit agreement, ensuring that the debtor fulfills their obligations and the creditor receives their due payments.

Q: Is a covenote a valid guarantee?

A: The validity of a covenote as a guarantee is highly questioned due to the lack of clear regulations and registration in existing laws and regulations.

Q: What are the risks associated with using a covenote as a basis for credit disbursement?

A: The risks associated with using a covenote as a basis for credit disbursement include the uncertainty of its validity as a guarantee, potential legal problems, and disputes between banks and debtors.

Q: Who is responsible for the accuracy of information in a covenote?

A: The notary/PPAT is responsible for providing accurate and reliable information in the covenote. If they fail to do so, they can be held liable for any losses or damages incurred by banks or creditors.

Q: What are the consequences of using a covenote that contains false or misleading information?

A: The consequences of using a covenote that contains false or misleading information can include a prison sentence of up to six years, disrespectfully dismissal, and the obligation to compensate for losses experienced by banks or creditors.

Q: What alternatives can be used instead of a covenote?

A: Alternative forms of guarantees or security that can be used instead of a covenote include mortgage deeds or collateral agreements, which are more clearly regulated and provide greater legal certainty.

Q: Why is it essential to understand the legal implications of using a covenote?

A: It is essential to understand the legal implications of using a covenote because of the risks and uncertainties associated with its use. By understanding these implications, parties involved in credit transactions can make informed decisions and take necessary precautions to mitigate potential legal problems.

Q: What should be done to improve the legal certainty of credit transactions?

A: To improve the legal certainty of credit transactions, the Notary Position Law, Government Regulation on PPAT, and the Banking Law should be revised to provide clear regulations regarding the issuance of covenote by notary/PPAT. Additionally, banks and debtors should be aware of the risks associated with using covenote and consider alternative forms of guarantees or security.

By understanding the FAQs about covenote, parties involved in credit transactions can make informed decisions and take necessary precautions to mitigate potential legal problems.