Cambodia Counsel

Before acquiring rights over land in Cambodia through purchase, lease or concession, it is important to perform background due diligence to confirm that it is legally safe to acquire the property.

Pre-Transfer Due Diligence

Before making a commercial decision, a prospective purchaser needs to be clear that the person claiming ownership is the legal owner of the property, fully recognized by the relevant authorities, either through title ownership or possessory rights under the Land Law. The property should be free of encumbrances, which include hypothecs (mortgages), pledges, liens and leases. It is equally important to investigate whether the property is the subject of a court dispute or an unresolved inheritance, or is situated in a restricted zoning area.

Post-Transfer Due Diligence

Following the transfer of title, it is prudent to check that the property has been properly transferred according to law and to the intended purchaser. The buyer generally undertakes this verification before making the final payment to the seller. It involves an inquiry with the local, cadastral and tax authorities involved in the transfer process.

Type of Land Title

Different types of property ownership require a different focus. Examples include:

  • Land without properly registered title;
  • Land with properly registered title;
  • Flat or apartment; and
  • Co-owned building (condominium).

Regardless of the type of title, the process has two parts: collection and review of title and related documents, and inquiries with the cadastral and local authorities and, in some cases, with local residents (field investigation). See Types of Title.

Review of Documents

  • Soft title: sale-purchase agreement; transfer of occupation.
  • Hard title: systematic land title; sporadic land title.

Whether soft or hard title, the following need to be verified:

  • Validity of the title, the signatures (or initials) and the stamps on it;
  • Whether the copy in hand reflects the current status of the title;
  • Classification of the land (relevant to whether conversion is possible);
  • Encumbrances on the title (long-term lease, hypothec, servitude);
  • The “Remarks” section of the title: continuation from a previous deed, record of the Memorandum and Articles of a company owner, and any corrections made to the inscription;
  • Any zoning or other restrictions in the area which could block an application for a construction permit or a transfer of title.

Online Verification

Hard title certificates issued since June 1, 2018 carry a QR code, and the Ministry of Land Management’s newer high-security certificates can be checked on the government’s verify.gov.kh portal by scanning the code or uploading the document. This is a quick first check that a certificate is genuine. It does not replace the document review and in-person inquiries described here, because some dealings and encumbrances are recorded only at the local level.

In-Person Inquiries

In-person inquiries are an essential part of land due diligence. They confirm that the information in the documents is true and up to date, allow inconsistencies to be investigated, and fill in information that has not been provided. It is important first to identify the official in charge, in order to evaluate properly the information supplied.

  • Adjacent land owners – neighbors have no official capacity, but they may have an overlapping interest that could give rise to a future dispute, and they can often provide the history of the property.
  • Village Chief – generally has no decision-making authority over the property, but often has essential historical knowledge of it, and will often know of family issues, disputes or unregistered encumbrances that could prevent a sale. Land sales, especially of soft title property, were commonly carried out privately without the formal transfer procedure, and only the Village Chief may know of them.
  • Sangkat or Commune Chief – soft titles are mostly issued at commune and district level. The Sangkat chief who signs the soft title document is the primary source for verifying that the soft title was issued or transferred from the previous owner, and that the named owner is the true and current owner.
  • District cadastral authority – many soft titles are registered only at district level, and hard title registration is also processed there. Some parties process a transfer only at district level to minimize costs, including transfer tax, so the district office may show a different current owner from the title document. Some encumbrances are recorded only at district level.
  • Municipal or provincial cadastral authority – hard title, long-term leases and hypothecs are registered at the national level with the municipal and provincial cadastral authorities. This inquiry verifies that the title deed was properly registered, was validly transferred in the past, and whether any encumbrance is currently registered.

Further Checks

  • Court proceedings: there is no unified searchable database of court filings. See Litigation Search. The Ministry of Justice publishes notices of court-ordered forced sales on its website.
  • Tax status: confirm that annual property tax, unused land tax and transfer tax on earlier transfers have been paid. Capital gains tax on the sale or transfer of immovable property is scheduled to apply from January 1, 2027.
  • Registration status of the area: if the area is undergoing systematic registration, transfers and the registration of security can be delayed.
  • Company sellers: confirm the company’s authority to sell and, where the buyer is a company, that it qualifies to own land. See Title Transfer.
  • Existing security: a registered hypothec must be released before transfer. See Mortgage.