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Understand the Kchessanyatun Laok Achaklantrubprouy

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When it comes to buying real estate in Cambodia, making sure you fully grasp the property sales contract is essential.

Indeed, not fully understanding the document you will sign can lead to financial losses, including the forfeiture of deposits, payment of penalties, unexpected costs, legal expenses, and potential poor investment decisions.

We've heard countless stories of people making costly mistakes when signing their property agreement in Cambodia. We want to help you avoid the same experience.

We'll give here a very brief overview regarding the property sales contract in Cambodia ; if you want a full checklist, please check our property pack for Cambodia.

What is the Kchessanyatun Laok Achaklantrubprouy in Cambodia?

In Cambodia, the property purchase agreement is a critical document in real estate transactions, commonly known locally as "កិច្ចសន្យាទិញលក់អចលនទ្រព្យ" (Kchessanyatun Laok Achaklantrubprouy).

This agreement outlines the terms and conditions of the property sale, acting as a formal contract between the buyer and seller.

The agreement is legally binding and serves as a guarantee for both parties.

For the buyer, it ensures the seller's commitment to transfer the property at the agreed price and conditions. For the seller, it secures the buyer's commitment to purchase the property.

The contents typically include details about the property, the agreed price, payment terms, and any other conditions both parties have agreed upon.

Regarding specific regulations for international buyers or non-residents, Cambodia has some restrictions.

Foreigners cannot own land directly but can own properties in buildings above the ground floor (from the first floor upwards), often through strata titles. They need to comply with local laws and may require additional legal guidance to navigate these restrictions.

In the purchasing process, the property purchase agreement is usually signed after both parties have agreed on the price and terms, often following initial negotiations or discussions. This is generally before any significant transfer of funds or the final sale.

Regarding the deposit, it is customary in Cambodia to pay a deposit once the agreement is signed. This deposit demonstrates the buyer's seriousness and commitment. The amount can vary, but it's typically around 10% of the total purchase price. This deposit is often non-refundable if the buyer decides not to proceed with the purchase.

Comparatively, the process in Cambodia may differ from other countries, especially regarding foreign ownership restrictions and the specific legal framework governing real estate transactions.

In some countries, the process might be more straightforward for foreign buyers, or there could be different steps involved in the transaction process.

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What should be included in the property purchase agreement in Cambodia?

In Cambodia, a property purchase agreement is a formal contract that needs to adhere to certain legal requirements to be valid and enforceable.

This agreement is governed primarily by the Cambodian Civil Code and the Law on Land.

The agreement must contain several key elements:

Key Element Description

Identification of Parties

Full names and details of both the buyer and the seller.

Property Description

A detailed description of the property, including its location, size, and any other relevant features.

Sale Price and Payment Terms

Clearly stated sale price and the terms of payment, including the deposit amount and the schedule for future payments.

Transfer of Ownership

Provisions detailing how and when the ownership will be transferred from the seller to the buyer.


Signatures of both parties, indicating their agreement to the terms.

Mandatory clauses usually include:

- The seller must guarantee that they have the legal right to sell the property and that the property is free from any encumbrances or liens.

- This outlines who is responsible for paying any relevant taxes and fees associated with the transaction.

Additional clauses might cover:

- Stipulations regarding the buyer's right to inspect the property and verify legal documents.

- Circumstances under which either party can withdraw from the agreement.

Conditions or contingencies can be included, such as:

- The buyer's obligation to purchase may be contingent on obtaining financing from a bank.

- The agreement might be contingent on the property passing certain inspections.

Regarding authentication, the agreement must be authenticated by a notary or relevant legal authority in Cambodia. This notarization is crucial for ensuring the legality and enforceability of the agreement.

Real estate agents in Cambodia can facilitate the process of buying and selling property, but they are not a legal requirement.

Their role may include helping to negotiate the terms of the sale, preparing the property purchase agreement, and guiding both parties through the legal and administrative procedures.

However, it's important to note that the legal aspects of the transaction, especially drafting and authenticating the agreement, typically require the involvement of legal professionals.

What's the signing process like?

In Cambodia, the signing process of a property purchase agreement is a formal and crucial step in real estate transactions.

Let's break down the process:

The property purchase agreement is typically bilateral, meaning it requires the signatures of both the buyer and the seller. It's important to note that both "the buyer" and "the seller" can indeed be multiple people.

In such cases, all parties involved on each side must sign the agreement. Both parties need to provide certain documents and information for the signing process.

This typically includes:

- Proof of ownership, government-issued ID or passport, and any other documents proving their right to sell the property.

- Government-issued ID or passport and proof of funds or financing.

The signing process involves several steps:

Step Description

Preparation of the Agreement

Once the terms are negotiated, the agreement is drafted.

Review and Approval

Both parties review the agreement, possibly with legal counsel.

Signing the Agreement

After review, both parties sign the agreement. The exact timeline for these steps can vary, but it's often completed within a few days to a week after the final agreement on terms.

In some cases, it may be possible to sign the agreement remotely, especially if one party is not physically present in Cambodia. This could involve the use of notarized documents and possibly the assistance of legal representatives.

There isn’t a universal deadline for signing the agreement. It depends on the agreement between the buyer and seller.

However, once agreed upon, the deadline should be adhered to, to avoid any legal complications.

The contract's validity duration is typically specified within the agreement itself. If not, it remains valid until the completion of the transaction, unless terminated by either party under the conditions specified in the contract.

After signing, the agreement must be registered with the relevant local authorities in Cambodia. This process involves submitting the signed agreement and the required documents to the local land office. This registration is essential for the legal transfer of property ownership.

Any amendments to the contract after it has been signed typically require the consent of both parties. These amendments must be made in writing and signed by both parties.

After signing, the completion of all necessary paperwork and approvals can take several weeks to a few months. This period includes the time needed for notarization, registration, and any inspections or due diligence required as per the agreement.

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How is the payment handled when signing a property purchase contract in Cambodia?

In Cambodia, understanding the financial aspects of a property purchase agreement is crucial for a smooth transaction.

Here's a breakdown of what you need to know.

When you sign the sales agreement, you typically need to pay a deposit or down payment. This amount shows your commitment to the purchase and secures the property.

The standard down payment in Cambodia is around 10% to 30% of the total property price. This can vary based on the agreement between you and the seller.

Apart from the down payment, there may be additional upfront costs such as notary fees, legal fees, and possibly a fee for a real estate agent if you are using one. These costs vary and should be clarified before the signing.

The payment is usually made directly to the seller.

However, in some cases, particularly in more formal transactions or when dealing with real estate companies, the payment may be made to an escrow account. This provides an additional layer of security for both parties.

The due date for the payment depends on the terms of the sales agreement.

Typically, the down payment is due upon signing the agreement, with the remaining balance due at a later specified date, often upon completion of the sale or transfer of ownership.

In Cambodia, there are tax implications for property transactions. Property transfer taxes are applicable, and these are usually the responsibility of the seller.

However, this can sometimes be negotiated in the sales agreement. The down payment amount is negotiable between you and the seller. It's part of the terms of the sales agreement and can be adjusted based on mutual agreement.

If the sale falls through, the conditions for the refund of the down payment should be specified in the sales agreement. Typically, if the sale falls through due to a failed inspection or financing contingency, the down payment may be refundable.

However, this depends on the specific clauses in your agreement.

Whether you can use a mortgage loan for the down payment depends on your financial arrangement with your lender. Some lenders may allow this, while others require the down payment to come from your personal funds.

An attorney or real estate agent can assist in handling the payment process, ensuring that all legal and financial protocols are followed correctly. They can also help negotiate terms and provide advice on the implications of the agreement.

It's essential to request a receipt or confirmation of payment when you make the down payment. This serves as proof of transaction and is important for your financial records.

Both parties have tax implications in the property transaction.

The seller typically bears the property transfer tax, while the buyer might need to consider the ongoing property tax obligations after the purchase.

What are the potentials risks and pitfalls?

You might be interested in reading our article about the common risks and pitfalls surrounding a property transaction in Cambodia.

Understanding the risks and pitfalls associated with property purchase agreements in Cambodia is important for both buyers and sellers.

In Cambodia, either the buyer or the seller can withdraw from the property purchase agreement under specific circumstances. These circumstances should be detailed in the agreement itself, such as failure to secure financing or unsatisfactory property inspection.

Cambodia's real estate transactions typically don't have a standardized cooling-off period like in some Western countries. The presence of a cooling-off period, where the buyer can back out without penalty, would be an exceptional clause in the agreement and not a general practice.

If a party wants to withdraw from the agreement, having a valid motive is usually necessary, especially if they don't want to face penalties. This motive might include things like the discovery of legal issues with the property title, the property failing a crucial inspection, or the buyer's inability to secure financing.

If a buyer is unable to secure financing and this contingency is included in the agreement, they can typically back out. The specifics would depend on the exact wording of the contract.

If one party fails to fulfill their obligations as outlined in the agreement, the other party may have legal grounds to seek compensation or enforce the terms of the agreement. This might involve retaining the deposit or seeking damages through legal action.

Penalties for breaching the agreement can vary. They often include forfeiture of the deposit for the buyer or financial penalties for the seller. The exact penalties should be clearly defined in the agreement.

If the agreement is terminated, how the money (like the deposit) is handled will depend on the terms of the contract and the reason for termination.

If the buyer is at fault, they may lose their deposit. If the seller is at fault, they may have to return the deposit along with additional compensation.

In many Western countries, real estate transactions often include standardized processes like a mandatory cooling-off period, more stringent disclosure requirements, and clearer guidelines for deposits and financing.

In Cambodia, the process can be less standardized and more dependent on the specific terms of the contract.

Common risks include issues with property titles, undisclosed property defects, and complications in the transfer process. Buyers should conduct thorough due diligence and possibly seek legal advice before entering into an agreement.

Disputes arising during the agreement are usually resolved through negotiation, and if necessary, legal action. The process for this would typically be outlined in the agreement itself.

If defects or issues with the property are discovered after signing, the buyer's recourse would depend on the terms of the agreement and Cambodian law. In some cases, this could lead to renegotiation of the agreement or legal action for compensation.

Disputes in real estate transactions can arise over issues like non-disclosure of property defects, delays in transferring ownership, or disputes over property boundaries. Resolving these disputes often involves legal proceedings, and outcomes can vary widely based on the specifics of each case.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.