Legislation to allow foreign ownership of property in Cambodia moved a step closer yesterday with the unveiling of a long-awaited sub-decree for registering and regulating condominium ownership.
The sub-decree, similar to what is known as a strata law in some countries, was approved by the Council of Ministers on July 29 and introduced by Minister of Land Management Im Chhun Lim at a meeting of ministry officials and members of the business community yesterday.
Mr Chhun Lim described the law as essential for “building trust in the market,” and a key step toward a hotly anticipated law permitting non-Cambodians to own real estate located above the ground floor.
Provisions governing co-ownership of buildings are required under the 2001 Land Law, but until now, no such policy has existed. Mr Chhun Lim explained yesterday that the confusion surrounding property ownership since the fall of the Khmer Rouge made this a difficult policy to write.
“It’s too complicated. That’s why it’s a bit late,” the minister said.
Matthew Rendall, a partner at the Sciaroni and Associates law firm and a member of a government’s working group on real estate, said yesterday that he was pleased with the final policy, and optimistic about the apparent simplicity of the titling process.
“You submit your title [to the Ministry], and you’ll get your 12 title deeds—for example—back within two months,” Mr Rendall said by telephone.
But whether the process is as straightforward in practice as it seems in principle remains to be seen.
“We’re going to use this law next week to get a property in Siem Reap titled,” Mr Rendall said. “We need to test the waters.”
He added that he was confident that approval of the co-ownership regulations would lead to quick passage of a foreign ownership law. “We’re hoping that it will happen in the next couple of months.”
Yesterday, Mr Chhun Lim said that his ministry and the Justice Ministry have both rubber-stamped a draft foreign ownership law. Mr Rendall added that the members of the private sector have been told they will see the draft within the next week or two.
According to the new sub-decree, a developer planning a multi-unit, multi-owner building must apply to the ministry to register the structure and receive titles for individual owners.
Under this scheme, the chunk of land beneath a co-owned development, as well as the common spaces within it, become the common property of all owners, and remains so even if the building is destroyed.
Before any private units in a new building can legally be sold, the developer is responsible for drafting rules outlining the upkeep of the building, allowable changes to units, and use of common areas. In the case of existing co-owned buildings, owners are jointly responsible for writing up the internal regulations, and any disagreements are to be resolved in the court system.
Once the building is complete and co-owners move in, “The share of the cost of the maintenance shall be proportional to the value of each lot,” where value is determined by the floor space of the units, according to the sub-decree.
Unit owners have the right to modify the interiors of their condos, as long as those changes do not “affect the common area or its uses by other co-owners and does not affect the solidity and the original appearance of the building.”
The rights and responsibilities enshrined in the sub-decree will apply to the current crop of skyscrapers under construction in Phnom Penh, such as the lofty Gold Tower 42, which will be the tallest building in Cambodia when it is completed and will feature 144 condominium units.
A representative of Yon Woo Cambodia, the Korean company responsible for the tower, said yesterday that his company was not ready to comment on the new regulations, as it had not yet received any information about the sub-decree.