Error in Draft Law Implied Only ‘Useful’ Expats Allowed

A single missing phrase in the English translation of the draft law on foreign property ownership gave the misleading impression that only “useful” foreigners would be al­lowed to buy real estate in Cam­bodia, officials said yesterday.

At a consultation meeting with members of the private sector, Sek Setha, an undersecretary of state at the Ministry of Land Management, said that there had been “a misunderstanding between the Khmer text and the English.”

Mr Setha said the law, which would allow non-Cam­bodians to own units above the ground floor in multi-owner buildings, would apply to “any foreigners who are legally qualified, period.”

However, he continued, the law would “especially” apply to so-called “useful” foreigners.

According to a Khmer copy of the draft distributed at yesterday’s meeting, co-ownership would be possible for any foreigner, “who is legally qualified in obtaining this right, especially foreigners whom the Royal Cambodian Government considers to be useful.”

The English draft of the law stipulated that all foreign co-owners must be considered useful by the government.

In both languages, the draft law’s definition of “useful” applied to any non-Cambodian who has “contributed to national economic development, or have provided assistance in social and cultural sectors or in the physical infrastructure development.”

Matthew Rendall, a partner at the Sciaroni and Associates law firm and a member of the government’s working group on real estate, told the meeting that he was satisfied with Mr Setha’s clarification of the draft’s wording. “That’s clear to us now,” he said.

However, after being informed of the clarification yesterday, David Coleman, property adviser for Cam­bodia Angkor Real Estate, said that the special considerations for “useful” foreigners remained troubling.

“What, they get a discount or something? It either applies to foreigners or it doesn’t,” Mr Coleman said by telephone. “It’s open to such wide interpretation that the potential for it being misused is quite large.”

He explained that Cambodia’s real estate business has taken a big hit this year, and he had been looking forward to the new law in the hopes that foreign investors would revitalize the industry. The latest draft, Mr Coleman said, is a disappointment.

“It’s not going to result in a great number of apartment sales. It’s just not,” Mr Coleman said. “We’re talking single figures or tens, not hundreds or thousands, which is what Cambodia needs.”

During yesterday’s meeting, Mr Rendall said that most of the private sector’s concerns about previous drafts of the law have been ad­dressed in the latest edition.

Although foreigners would only be permitted to own up to 49 percent of the total number of units in a building, the overall number of units owned by a single foreigner throughout the country is not restricted. A previous draft had limited each foreigner to owning no more than two units in Cambodia.

The latest draft contains at least three different methods for defining how a foreigner’s rights and responsibilities will be apportioned in a co-owned building. Their share in the cost of maintenance in common areas would be determined by “the value of each unit,” while repair costs for the building are allocated according to the units’ “market value.”

If the building is destroyed and the Cambodian co-owners agree to sell the land, foreign co-owners will share in the profits according to the “surface size of their private units.”

Mr Rendall suggested that a universal definition of the rights and responsibilities of each co-owner be assigned in a percentage set out in the title certificate.

After the meeting yesterday, ministry of land management spokeswoman Nun Theany said by telephone that the ministry would consider the concerns ex­pressed by members of the private sector.

“We will use those ideas to modify the draft law,” she said, adding that she could not give a timeline for any modifications. “We asked [the private sector] to provide us their recommendations in writing later—especially the real estate companies.”

Ms Theany said the ministry hopes that a final draft of the law will reach the National Assembly by the end of the year.

 

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