Understanding Strata Title Process in Cambodia
Updated on: July 11, 2023, 4:36 a.m.
Published on: July 10, 2023, 7:30 a.m.

Understanding Strata Title Process in Cambodia

The process of obtaining strata titles in Cambodia is essential for property developers and buyers seeking individual ownership of units within a multi-unit development. Strata title ownership allows individuals to own their private units while sharing ownership of common areas and facilities with other unit owners. In this article, we will delve into the steps involved in creating a strata title and the crucial aspects of the transfer process in Cambodia.

Steps to Creating a Strata Title

The process begins with the developer acquiring the land where the development will occur, holding a hard title in the development company's name. However, this master title does not permit the direct transfer of private unit ownership to individual buyers. Instead, the developer must transfer the total collection of split titles into their name and ownership. For instance, if there are 20 units in development, there must be 20 separate titles created from the original hard title. The Ministry's land department will review the common areas' regulations and practices at this stage to ensure proper management and insurance. Only after the land department is satisfied will they issue the strata titles. Once the individual titles have been created and transferred to the company's ownership, the developer can transfer them to individual buyers.

Transfer of Strata Title to the End Buyer and Owner

The Ministry of Land Management, Urban Planning, and Construction (MLMUPC) requires fully certified documentation of the identity and marital status of the end buyer. These documents must also be translated into Khmer since the strata title is exclusively in Khmer, and English names are not permitted. Different processes and documentation are applicable to Khmer buyers, foreign buyers, and the development company. To ensure a smooth transfer process, many developers engage the services of legal firms to review the certified documents, liaise with the land department, and provide legal assistance to buyers throughout the process. 

Physical Presence in Cambodia for Title Transfer

One essential requirement for the strata title transfer is the physical presence of the buyers in Cambodia. They must personally affix their thumbprint on the certified documentation, including the Vente Definitive and the Application for Ownership Transfer. These documents are standard templates provided by the land department. For international investors, this means they have to return to Cambodia to complete the title transfer.

Accrued Costs during the Transfer Process

Several costs are associated with the strata title transfer process. The conversion of the master title incurs a public service fee per strata title. Additionally, there is a public service fee for issuing each individual strata title in the buyer's name. As for the transfer tax, the land department will review and accept the certified documentation, after which it will be submitted, along with other forms to the General Department of Taxation. The tax officials will assess the property value based on predetermined ranges and calculation methods, issuing an invoice for the transfer tax amount. Upon payment of the tax by the buyer, the land department will complete the title transfer.

Importance of Strata Title Transfer

Buyers who refuse to proceed with the strata title transfer may encounter problems when reselling the property. Potential buyers may be hesitant to proceed with a purchase if they are unable to ascertain whether there are any disputes, mortgages, judgments, or unpaid taxes associated with the property. While some developers might agree to hold the title for buyers, this arrangement can lead to later complications and is generally not advised. To ensure a smooth transfer and avoid such issues, it is recommended that buyers enlist the assistance of a reputable legal firm experienced in strata title processes, ensuring constant communication with the developer and seeking proper education on the process.

If you are looking for guidance from a real estate expert in Cambodia, feel free to get in touch today