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Cambodia Rental Housing Laws And Regulations And Precaution

279
2022-12-29
Summary:If you plan on staying in Cambodia for more than a few months, you will probably want to rent a place to call your own. This is particularly true for foreigners, who cannot easily own land.

If you plan on staying in Cambodia for more than a few months, you will probably want to rent a place to call your own. This is particularly true for foreigners, who cannot easily own land.

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Laws and regulations

1. Term of Lease

The lease period is usually 6 months onwards with or without an option to renew. Rental negotiation also correlates with the term of tenancy you are willing to commit; the longer the tenure, the more discount landlords are willing to provide.

2. Rental Payment

Rental normally includes fittings and fixtures and maintenance fees but excludes utility bills for water and electricity. Most serviced apartments are equipped with internet and cable TV, but some landlords provide it at an additional charge. Rentals are payable monthly in advance.

3. Security Deposit

The security deposit required by the landlord will depend on the length of the lease period and the type of the lease (i.e. a Company Lease or Personal Lease). A security deposit equivalent to 1 to 2 months of the monthly rental is the norm and is payable in full on signing the Tenancy Agreement. It is refundable without interest at the end of the tenancy subject to the tenant’s compliance with the terms and conditions of the lease. The landlord reserves the right to deduct from the deposit all costs and expenses if the tenant breaches any of the terms in the Tenancy Agreement. Tenancy Agreements are generally prepared in Khmer and English. However, in a dispute, the Khmer version will be prevalent.

4. Legal Fees

Unless the landlord insist on having a solicitor prepare the Tenancy Agreement whereby the Tenant has to bear such legal fees and other incidental costs for the Agreement, usually, the Tenancy Agreement is prepared by the landlord or housing agent at no charge.

5. Tax on Rental

The tax rate on the property rental is equalised at 10% of the gross rental as written in a contract or an agreement with lessees. This is payable to the General Department of Taxation of Ministry of Economy and Finance. However, taxes are only collected from the proprietors or landlords.

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Precaution

1. Doing research

  • Whether you use an agent, online classifieds, or call a number off a For Rent sign, once you’ve found the place that’s right for you, you’ll want to do some background investigation to see if you would be wise to sign the lease.

  • Know who you are renting from. While it is best to avoid difficult landlords wherever you are, this is particularly true in a country with weak rule of law and an inefficient court system. At a minimum, you should meet the landlord in person to discuss the property and the terms of the lease. Ask where they work, how long they’ve owned the property, who the prior tenants were and why they moved out. If something doesn’t strike you as right, investigate further. You want to find a reputable and trustworthy landlord.

  • You need to confirm that the person who presents themselves as the landlord, actually is the landlord. Extended families in Cambodia often live and manage properties communally, but the legal landlord is the person with their name on the title document. Ask to see the title, or if none is available, their land purchase contract.

  • Scope out the neighborhood for any potential nuisances. Crowing roosters, roaming dog packs, and empty lots that turn into a construction site from one day to the next, can make for an impossibly noisy environment.

2. Sealing the Deal

  • If you are renting through a real estate agent, they will most likely provide a form contract. Take this as an opening proposal; all the significant terms should be open to negotiation. Be aware that contract negotiations in Cambodia can be very different from what you might expect in your home country. What the landlord told you orally when you first visited might have changed when it’s time to sign the agreement. A healthy dose of patience will see you through.

  • The contract should be in English and Khmer, and include a clause making both equally binding. Cambodian law imposes few restrictions on the terms of the contract, and there is no rent control to control future rent increases. The rental term can be for a fixed-period, month-to-month, or even year-to-year.

  • If you think you might want to extend beyond the lease’s expiration, you might include a clause giving you the right to renew at a certain price. You’ll undoubtedly be asked for advanced payment of rent, or a security deposit. Be sure this amount is clearly stated in the lease agreement, and that it must be returned to you in full, plus interest, upon completion of the lease. For any cash payments – deposit, rent, or utilities – demand a signed receipt, it could be your only record in case of a dispute. Finally, be sure to get a signed copy of the lease for your own records; the landlord and real estate agent should have their own.

3. Dealing with Disputes

  • Unexpected rent increases, broken air conditioners, noisy neighbors and unfair evictions are just a few of typical landlord-tenant conflicts. Unlike some places, Cambodia does not have a specialized landlord-tenant dispute resolution procedure. And given the troubles in the Cambodian court system, suing your landlord is not an option most tenants choose to pursue.

  • Thankfully, most disputes in Cambodia are resolved through negotiation; rental conflicts are no exception. Hopefully you did a little investigation before you moved in and found a landlord you can trust.

  • Whatever the issue, do some research to fully understand your rights, and approach your landlord in a non-confrontational manner. If for example, your landlord refuses to fix a broken water heater, you might consider hiring someone yourself to fix it, and deducting the cost from the next month’s rent. Above all, try to be upfront and come to a negotiated agreement. You could end up being evicted and losing your security deposit if things go wrong.

  • Disputes with neighbors require a different tack. Noise, parking spaces, and trash are common concerns, especially for those adjusting to life in Cambodia. You might decide to talk to your neighbor yourself, or ask your landlord to do so on your behalf. Chances are, your landlord knows the neighbor already. If the problem persists, you can complain to your local Sangkat (commune) office. With payment of a modest fee, they can mediate between you and the troublesome neighbor. Again, patience and understanding are key to a successful resolution.

4. Moving Out

  • Avoiding problems when moving out requires a bit of foresight, particularly when first drafting your lease agreement. If the contract doesn’t contain a termination clause, getting out of the lease can be difficult and costly. You’ll want to include a clause specifying when you can move out prior to the end of the lease, and when your landlord can evict you. Be sure to include a penalty clause for early eviction – it will be hard to stop a landlord determined to remove you, but at least you will be compensated. Also, a sublease and assignment clause is a good idea, particularly if there’s a chance your job will reassign you to a new location.

  • If you put down a security deposit, you have a right to get the amount in full, plus interest, before moving out. Your landlord can deduct the reasonable cost of repairs for anything beyond normal use. To avoid paying for damage you didn’t cause, be sure to do a full inspection, with your landlord present, before moving in.

  • For the unprepared, renting a home in Cambodia can be stressful and unpleasant. This guide has hopefully provided you with a few key practical points to help you manage this process. For draft lease agreements, negotiation counseling, or legal representation in dealing with your landlord, experienced professionals at BNG Legal are ready to help.

 

Source: hg.org, knightfrank

Disclaimer: The re-forward articles on Compass website are for the purpose of conveying more information, and it does not mean that the Compass website agrees with its views or confirms the authenticity of its content. Article noted as "Source: Compass original", please note that the source from Compass. The content of the article is for reference only and should not consider as investment advice, and it does not mean that Compass agree with its views.

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