2019
Land Law and Regulations in Cambodia
ThismemorandumdiscussesbasiclawsandregulationsinCambodiagoverninglandownershipandprocedurestoobtainhardtitlesofthelandandlandusagesuchasmortgageandlease.Thismemorandumispreparedbasedonouranalysisofthefollowinglaws:1-CivilCodedated08December2007(“CivilCode”);2-LawonImplementationofCivilCodedated31May2011(“LawonImplementationofCivilCode”);and3-LandLawdated30August2001(“LandLaw”)MostarticlesintheLandLawwereabrogatedbytheprovisionsofCivilCodeandtheLawonImplementationoftheCivilCode.A.HistoricalOverviewDuringtheDemocraticKampuchearegime(1975-79),theKhmerRougeabolishedownershipoflandanddestroyedallexistingofficiallandrecordsinCambodia.Atthistime,privateownershipoflandwasabolishedandalllandbelongedtotheState.ForthedecadefollowingtheoverthrowoftheKhmerRougeregime,theStatecontinuedtoownallland.Thisbegantochangetowardstheendofthe1980s,andin1992,aLandLawwaspassedwhichrecognizedthatallCambodianshavetherighttoownandtransferland.Bythistime,manyproperties,especiallyinPhnomPenh,wereinformallyownedbypoliticallypowerfulorwell-connectedfamilies,orhadbeenoccupiedbyrefugeeswhohadmovedintothecityfromthecountryside.From1995to2002,pilotprojectssupportedbytheGerman,FinnishandFrenchgovernmentsregistered81,000landparcels.Duetoongoinglanddisputesamongprivatepersonsandprivatepersonsandbigcompanies,thegovernmentofCambodialaunchedin2012acampaigntomeasurelandanddelineatesboundariesandprovidestitlestoCambodianpeople.Whilstthisprojectachievedsomesuccess,landdisputesremainasignificantissueinCambodia.B.LandLawAnewLandLawwaspromulgatedin2001toestablishaframeworkfortherecognitionoflandandpropertyrightsthroughoutCambodia.Thislawaddressedthefollowingtopics:❖privateownershipforbothresidentialandagriculturalholdings;❖creationofalandregistryandsystemsforregisteringtitlesandencumbrances;❖mechanismsforidentifyingtheboundariesofstateland;❖mechanismsfordistributionofstateland,as“socialconcessions”;❖communaltenureforindigenouscommunitiesandreligioussites;and❖acaponindustrialagriculturalconcessionsto10,000hectares.ThefullimplementationoftheLandLawanditsassociatedregulationsisexpectedtotakemanyyears.Duetolingeringuncertaintyoverpossessionandownership,itisimportantforinvestorstoperformduediligencebeforeacquiringanypropertyinterestsinland.Eventoday,thelegallegitimacyoflandholdingvarieswidely.C.CivilCodeTheCivilCodewaspassedin2007andcameintoforcethroughtheLawontheImplementationoftheCivilCodeattheendof2011.TheCivilCodeclarifiedmajorissuesrelatingtolandandpropertyinCambodiaasfollows:Ownershipofrealproperty:Realpropertycanbeacquiredbyacquisition,contractandsuccession.Inaddition,itprovidesforacquisitionbypossession:apersonwhopossessesapieceoflandformorethan20yearswiththepurposeofpossessionshallacquiretherealproperty.Aperiodof10yearsshallapplyinthecasethatthepossessioninthefirstplaceisnotintheformofawrongfulordishonestact.Long-termlease:Longtermleaseisaleaseagreementoverrealpropertyfor15yearsormore.Alongtermleaseshallnotexceed50yearsbutrenewalforuptoanadditional50yearsispermitted.Privateownershipofstateland,Buddhisttemples’land,minorityethnicgroups’landandothercommunities’landisnotpermitted.D.TitlingTheLandLawanditsassociatedregulationshavecreatedtwodifferentwaystoregisterland.Inthesystematicsystem,thegovernmentchoosesareasinwhichallplotsoflandaremeasured,registeredandtitled,untileventuallythewholecountryisregistered.Incontrast,sporadicregistrationisinitiatedbyownersapplyingforlandtitlesfromthecentralCadastralOffice.E.PossessionAlllegalpossessorsoflandhavetherighttoconverttheirpossessionintoownershipwhensystematicregistrationcomestoanareaorasporadictitleisappliedfor.Toconstitutelegalownership,possessionmusthavecommencedbefore30August2001,andmusthavebeencontinuous,peaceful,honest,unambiguousandknowntothecommunity.TherecanbenolegalpossessionofStatepublicland,privatelandheldbyanindividual,orcollectiveland.Legalpossessionoflandisnotasstrongasownership,butitgivesthepossessorrightstoliveontheland,transferittoothers,andtopreventpeoplefromtrespassingontheland.Inpractice,titlerequestsareoftenrefused,especiallyforcommunitieswhoarefacingthethreatofforcedeviction.Otherbarrierstoregistrationincludethe4%transfertaxchargedbytheCadastralOffice,highunofficialfees,andprocessingdelays.Manylegalpossessorsmayalsolacksufficientevidenceoftheirownershiptosatisfyauthoritiesoftheirclaim.F.LMAPIn2002,theLandManagementandAdministrationProject(LMAP)wasinitiatedtoimplementsystematicregistration,withthesupportoftheWorldBankandthegovernmentsofGermany,FinlandandCanada.TheobjectiveoftheprojectistoassisttheRoyalGovernmentofCambodiatoreducepoverty,promotesocialstabilityandstimulateeconomicdevelopmentthroughimprovinglandtenuresecurityandpromotingthedevelopmentofefficientlandmarkets.Inworkingtowardsitsobjectives,LMAP,anditsrecentincarnationasLASSP(LandAdministrationSub-SectorProgram)hashadanumberofsuccesses.Theseincludedevelopingkeypartsofthelegalframeworkforlandadministration,trainingMinistryandtechnicalstaff,andadjudicatingoveramilliontitles.Pursuanttoitsmandate,thetitlesissuedhavebeeninpredominatelyruralareasthatarenon-contentiousandarerelativelyeasytoadjudicate.LMAPtitlesareconsideredreliableastheyareanchoredtoGPSpointsandmaybevaluedatapremiumbyforeignpurchasers.G.LandTitlesSoftTitleLandheldundersofttitleisregisteredatthelocalsangkat(council)ordistrictlevelonlyandnotatthenationallevel.Itistechnicallyconsidered“possession”statusandnotownership.Softtitledocumentationcantakeavarietyofforms,includingbuildingapplicationswhichactasproofofownership.Ownerswithnoevidentiarydocumentationmayrequestapossessionstatuscertificatefromthelocalsangkat.Aletteroftransferfromthepreviouspossessorstampedbythesangkatandthedistrictofficeisalsoproofofsofttitle.Iflandtobepurchasedissofttitle,thebuyershouldconductduediligenceatthesangkatanddistrictofficetoidentifywhothelocalofficialsviewastheowneroftheland.Similarenquiriesshouldbemadeofneighbors.Thepropertyboundaryshouldbecarefullychecked,asbordersareoftennotproperlydemarcatedandoverlapscanbesignificant.HardTitleAhardtitleisanownershipcertificatewhichisissuedbytheCadastralOfficeandrecognizedatnationalministeriallevelaswellasatthesangkatanddistrictlevel.Thisisthemostsecureformofownership,asregistrationshouldbetheonlyevidencerequiredofindefeasibletitle.However,manytransactionsorownershiptransfersarestilllargelydonewithsofttitledeedsandatthecommuneanddistrictlevelintheinterestsofaspeedytransactionandtoavoidpayinghighertransactioncosts,includingpropertyregistrationtaxat4%,ownershiptransferfees,andunofficialfees.TheownershiptransferprocessattheCadastralOfficeusuallytakesbetweenonetofourweeks.H.UsageofLandforSecuringtheLoanRepaymentUndertheCivilCode,thereareonlytwocategoriesofsecuritymechanismsavailableforthelandownertosecuretheloanrepaymentwiththebank:(a)hypothecand(b)pledge.a)hypothecTheCivilCodenewlyreintroducedthenotionof“Hypothec”bywhichthelandmaybeusedtosecureoneormoreloansintheabsenceofthetransferofthetitledeedtothecreditor(bank).Legallyspeaking,ifthelandisunderpledgeorhypothec,theownerofsuchlandcannotfreelysellordisposetheland,unlessthesubjectlandhasbeendulydischargedfromthepledgeorhypothecbytheCadastralOffice.b)PledgeUndertheCivilCode,acreditorisentitledtoholdpossessionofthethingthatithasreceivedfromdebtorsorathirdpartyassecurityfortheirclaims,andtoobtainsatisfactionofhis/herclaimoutofsuchthinginpreferencetoothercreditors.Itmeansthatiftheownerchoosestoputhis/herlandunderapledgeagreement,thesubjectlandwillbetransferredintopossessionofthecreditor,unlessotherwiseagreedbythepartiestothepledgeagreement.Thetermofthepledgeisupto5yearsandrenewable.I.ForeignOwnershipofLandForeignerswereformerlybarredfromowninglandinCambodiaunderArticle44oftheConstitution,althoughtheInvestmentLawof1994permittedinvestorstouseanddevelopland,andtosignunlimitedlong-termleaseagreements.Generally,privatelandcanonlybeownedbyCambodianindividualsorbyCambodianlegalentities.AlegalentityhasCambodiannationalityif51%ormoreofitssharesareheldbyCambodiancitizens.Arecentsub-decreepassedbytheCouncilofMinistersnowallowsforeignerstopurchaseupto70%ofabuilding,withtheexceptionofthegroundfloororwithinacertaindistancesfromaninternationalborder.Investorshavesofarbeencautiousintakingadvantageofthisopportunity.Itisanticipatedthatatleastintheearlyyears,itwillbemainlynewapartmentsratherthanpre-existingonesthatwillbepurchasedinthismanner.TherearealternativewaysforforeignerstoinvestinCambodianproperty:Long-termLease/LandConcessionLong-termleasesareanothercommonwaytocontrolland.Thereisnomaximumtermforwhichlandcanbeleasedfromaprivateowner;leasescommonlylastfor50,70or99years.Aclausecanbeinsertedintotheleaserequiringtheownertogetthelessee’spermissiontosell,and/orentitlingthelesseetoconverttofullownershipwiththelessor'scooperation.Inaddition,a‘blocksalenotice’canberegisteredwiththeLandOffice,instructingtheofficenottosellthelandwithoutthelessee'spermission.LongtermleasescannowberegisteredatthenationalCadastralOfficeandnotedonthelandtitledeed.A99-yeartermisbasedontheLandLaw,butundertheCivilCode,thetermofthelongtermleaseisupto50years.AccordingtotheLawontheImplementationofCivilCode,ifalong-termleasewasgrantedpriortotheentryintoforceoftheCivilCodeandtheremainingtermexceeds50years,thetermwillsurvivetheCivilCode’sterm.However,iftheremainingtermofthelong-termleaseexceeds99years,itwillbereducedto99years.Inaddition,acertificateseparatemaybeissuedtothetitledeednotingthelessee’sinterestsintheproperty.Thiscertificatecanbetradedbythelesseeandusedassecuritytoobtainfinancing.Thecompetentauthoritymaygrantaconcessiontoanynaturalpersonorlegalentityorgroupofpersons.Landconcessionshallrespondtoasocialoreconomicpurpose.Thetermofconcessionvariesfromcasetocase.UndertheCivilCode,thetermoflandconcession(orperpetuallease)islimitedto50years,butcanberenewed.AlandconcessioncanonlybegrantedonlandthatisnottheprivatepropertyoftheState.Landconcessionsareasshallnotbemorethan10,000hectares.J.StateLandTheLandLaw2001dividedlandintothreemainclassifications:Stateproperty,privatepropertyandcollectiveproperty.StatepropertyisdividedintoStatepublicandStateprivateproperty.Collectivepropertyisdividedintomonasteryandindigenouscommunityproperty.Statepublicpropertyispropertythatisavailableforthepublictouse,orpropertythatprovidesaservicetothepublic.Thisincludespropertyofnaturalorigin(forests,riverbanks,seashores,lakes)andairports,roads,publicgardens,publichospitals,administrativebuildingsandarcheological,cultural,orhistoricalsitessuchasAngkorWat.Statepublicpropertycannotbeboughtorsoldbypeopleorcompanies.Itmaybeleased,butfornolongerthan15years,andthelessormustnotdamagethelandorchangeitspublicfunction.However,ifthelandisnolongerusedforthepublicinterest,itcanbecomeStateprivatepropertybyprime-ministerialsub-decree.StatepropertythatisnotpublicisStateprivatepropertyandmaybesoldorleasedbytheGovernmentinaccordancewiththelaw.TheStatemaycompulsorilyacquireprivatepropertyifitisinthepublicinterestandtherearenoviablealternatives.Inthissituation,theStatemustgivetheownersfaircompensationbeforetakingtheland.UndertheLandLaw,theGovernmentshouldalsoensurethatthoseevictedhaveaccesstoalternativeadequatehousingandland.

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