Strata Titles have been a staple in the real estate sector for years, but how did it start and how does it work exactly?
Grant Fitzgerald, Country Manager for Independent Property Services Cambodia, gives us a rundown on the topic in his recent interview with Realestate.com.kh.
How did the Strata Title Law Start and Evolve?
Given Cambodia’s desire to grow economically, Fitzgerald explains that the government created the concept of building co-ownership for foreign investors through Strata Titles. He states that there had been much confusion as to the allowance and limitations of this concept since its introduction, but he clarifies that the strata titles are only applicable for buildings constructed after 2010. He adds that foreigners can only own up to 70 percent of the property which should be above the ground floor, and should not be within 30 kilometers of any border.
How Strong is a Strata Title and how do End-buyers verify it?
Given that the strata title is legitimate, strata titles are a strong form of ownership, Fitzgerald qualifies. He says, “The Strata Title’s registered at the Ministry of Land Management, which is the highest level of government here. So, any title issued at the ministry is a very strong form of ownership.”
To verify the legality of the title, you should do ask for both the master hard title and the master development plan.
Fitzgerald explains that this gives you access to key information such as the owner’s details, the property details, and the title classification itself – if it really is a hard title. He said, “A part of the process of applying for strata titles is that it needs to be built on a hard-title property. If a developer doesn’t have a hard title, they have a soft title, then they won’t be able to apply for a legitimate strata title condominium.” A developer will also not be able to apply without first submitting a master plan. In addition to that, foreigners aren’t allowed to own properties only with a soft title.
Fitzgerald also advises to check the sales and purchase agreement for any reference to strata titles and co-ownership. Without mention of it, he says it should raise a red flag.
How is a Strata Title Turned Over/transferred?
“The titles are officially applied for when the units are a hundred percent finished and they’re ready to be handed over. That’s when the final paperwork for the strata title’s submitted,” Fitzgerald mentions. He also says that all parties must be present in the country in front of the ministry for transfers to occur.
Fitzgerald also mentions that names of the spouses are not required to be on the title unless a buyer wants their spouse to be on it. In this case, the spouse should also be present for the transaction.
Strata titling has recently undergone a crackdown due to leniency in the past. And as the government pursues ways to improve growth, we maybe yet to see the strata title law and practice evolve into, hopefully, better forms.